This document is dated February 13, 2006. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.
12/31/2005 | ii |
NOTES
Definitions and Presentation
"Income from Operations," "Operating Revenue," and "Return on Capital" are non-GAAP financial measures and do not replace GAAP net income (loss) and revenues. Detailed reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure are included in this statistical supplement.
* | We exclude the after-tax effects of the following items from GAAP net income to arrive at income from operations: |
* | Realized gains and losses on investments and derivatives, | |
* | Restructuring charges, | |
* | Gains and losses related to reinsurance embedded derivatives/trading account securities, | |
* | The cumulative effect of accounting changes, | |
* | Reserve changes on business sold through reinsurance net of related deferred gain amortization, | |
* | Gains and losses on the sale of subsidiaries and blocks of business, | |
* | Loss on early retirement of debt, including subordinated debt |
* | Operating revenue represents revenue excluding the following, as applicable: |
* | Realized gains or losses on investments and derivatives, | |
* | Gains and losses related to reinsurance embedded derivatives/trading account securities, | |
* | Gains and losses on the sale of subsidiaries and blocks of business, | |
* | Deferred gain amortization related to reserve changes on business sold through reinsurance, |
* | Return on capital measures the effectiveness of LNC's use of its total capital, which includes equity (excluding accumulated other comprehensive income), debt and junior subordinated debentures issued to affiliated trusts. Return on capital is calculated by dividing income from operations (after adding back interest expense) by average capital. The difference between return on capital and return on shareholders' equity represents the effect of leveraging on LNC's consolidated results. |
Income from operations, operating revenue, and return on capital are internal measures used by LNC in the management of its operations. Management believes that these performance measures explain the results of operations of LNC's ongoing operations in a manner that allows for a better understanding of the underlying trends in LNC's current business because the excluded items are either unpredictable and/or not related to decisions regarding the underlying businesses.
* | Certain operating and statistical measures are included in this report to provide supplemental data regarding the performance of LNC’s current business. These measures include deposits, sales, net flows, first year premium, inforce, spread, and assets under management. |
* | On September 24, 2004, LNC completed the sale of its London-based international investment unit to its management. Certain metrics pages (2 and 14A) have been presented excluding the investment assets managed by the London-based international investment unit to provide more consistent comparisons between periods. |
* | Certain reclassifications have been made to the prior periods presented to conform to the December 31, 2005 presentation. |
Accounting Changes
* | Effective January 1, 2004 LNC Implemented Statement of Position 03-1, "Accounting and reporting by Insurance Enterprises for certain nontraditional long-duration contracts and for Separate Accounts" ("the SOP"). Among other things, the SOP establishes standards for computing reserves for products with guaranteed benefits such as GMDB and for certain riders for Universal Life contracts. The effects of implementing the SOP, including any related effects on DAC from changes in estimated gross profits resulting from implementing the provisions of the SOP were recorded as a cumulative effect adjustment of $24.5 million in the first quarter of 2004. |
12/31/2005 | PAGE 1 | ||||||||||||
Financial Highlights | |||||||||||||
Unaudited [Millions of Dollars, except Common Share Data] | |||||||||||||
For the Quarter Ended | For the Year Ended | ||||||||||||
December 31 | December 31 | ||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||
Amount | Amount | Amount | Amount | ||||||||||
Income from Operations - By Segment | |||||||||||||
Lincoln Retirement | $ | 117.3 | $ | 100.5 | $ | 471.5 | $ | 414.6 | |||||
Life Insurance | 80.2 | 74.0 | 298.9 | 280.3 | |||||||||
Investment Management | 14.6 | 5.2 | 36.0 | 43.6 | |||||||||
Lincoln UK | 13.5 | 16.6 | 43.4 | 43.5 | |||||||||
Corporate & Other | 6.7 | (6.3 | ) | 1.8 | (57.2 | ) | |||||||
Total Income from Operations | 232.3 | 189.9 | 851.6 | 724.8 | |||||||||
Realized gains (losses) on investments and derivatives | (6.1 | ) | 4.3 | (14.5 | ) | (37.4 | ) | ||||||
Net gain (loss) on reinsurance | |||||||||||||
derivative/trading account securities | - | (0.8 | ) | 3.0 | (0.6 | ) | |||||||
Gain on sale of subsidiaries/ businesses | - | 0.4 | 9.3 | 61.9 | |||||||||
Reserve development/ amortization of related deferred gain | 0.2 | 0.2 | 0.9 | 0.9 | |||||||||
Loss on early retirement of subordinated debt | - | (4.1 | ) | - | (4.1 | ) | |||||||
Restructuring charges | (1.1 | ) | (0.0 | ) | (19.1 | ) | (13.9 | ) | |||||
Cumulative effect of accounting change | - | - | - | (24.5 | ) | ||||||||
Net Income | $ | 225.3 | $ | 189.9 | $ | 831.1 | $ | 707.0 | |||||
Earnings per share (diluted) | |||||||||||||
Income from Operations | $ | 1.31 | $ | 1.07 | $ | 4.83 | $ | 4.05 | |||||
Realized gains (losses) on investments and derivatives | (0.03 | ) | 0.02 | (0.08 | ) | (0.21 | ) | ||||||
Net gain (loss) on reinsurance | |||||||||||||
derivative/trading account securities | - | - | 0.02 | - | |||||||||
Gain on sale of subsidiaries/ businesses | - | - | 0.05 | 0.35 | |||||||||
Reserve development/ amortization of related deferred gain | - | - | - | - | |||||||||
Loss on early retirement of subordinated debt | - | (0.02 | ) | - | (0.02 | ) | |||||||
Restructuring charges | - | - | (0.11 | ) | (0.08 | ) | |||||||
Cumulative effect of accounting change | - | - | - | (0.14 | ) | ||||||||
Net Income | $ | 1.28 | $ | 1.07 | $ | 4.72 | $ | 3.95 | |||||
Operating Revenue- By Segment | |||||||||||||
Lincoln Retirement | $ | 573.3 | $ | 539.4 | $ | 2,258.0 | $ | 2,128.0 | |||||
Life Insurance | 519.6 | 503.7 | 1,993.5 | 1,952.9 | |||||||||
Investment Management | 152.7 | 127.7 | 567.8 | 534.9 | |||||||||
Lincoln UK | 62.5 | 89.3 | 318.4 | 342.2 | |||||||||
Corporate & Other | 89.2 | 81.1 | 352.1 | 335.1 | |||||||||
Total Operating Revenue | 1,397.4 | 1,341.2 | 5,489.8 | 5,293.2 | |||||||||
Realized gains (losses) on investments | (9.6 | ) | 7.2 | (21.7 | ) | (45.7 | ) | ||||||
Gains (losses) on derivatives | 0.2 | (0.4 | ) | (0.5 | ) | (11.6 | ) | ||||||
Gain (loss) on reinsurance | |||||||||||||
derivative/trading account securities | 0.0 | (1.4 | ) | 4.7 | (1.0 | ) | |||||||
Gain on sale of subsidiaries/ businesses | - | 0.6 | 14.2 | 135.0 | |||||||||
Amortization of deferred gain-reserve development | 0.3 | 0.3 | 1.3 | 1.3 | |||||||||
Total Revenue | $ | 1,388.4 | $ | 1,347.5 | $ | 5,487.9 | $ | 5,371.3 |
12/31/2005 | PAGE 2 | ||||||||||||
Financial Highlights | |||||||||||||
Unaudited [Billions of Dollars] | |||||||||||||
For the Quarter Ended | For the Year Ended | ||||||||||||
Operational Data by Segment | December 31 | December 31 | |||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||
Amount | Amount | Amount | Amount | ||||||||||
Lincoln Retirement | |||||||||||||
Gross Deposits | $ | 2.639 | $ | 2.387 | $ | 10.310 | $ | 9.020 | |||||
Net Flows | 0.621 | 0.794 | 2.887 | 2.922 | |||||||||
Account Values (Gross) | 72.462 | 64.788 | 72.462 | 64.788 | |||||||||
Account Values (Net of Reinsurance) | 70.229 | 62.491 | 70.229 | 62.491 | |||||||||
Life Insurance Segment | |||||||||||||
First Year Premium- Retail (in millions) | $ | 262.644 | $ | 231.160 | $ | 845.428 | $ | 812.565 | |||||
First Year Premium- COLI (in millions) | 13.113 | 20.376 | 70.481 | 73.657 | |||||||||
First Year Premium- Total (in millions) | 275.757 | 251.537 | 915.910 | 886.222 | |||||||||
In-force | 324.369 | 304.579 | 324.369 | 304.579 | |||||||||
Account Values | 15.368 | 14.382 | 15.368 | 14.382 | |||||||||
Investment Management Segment | |||||||||||||
Retail Deposits | $ | 3.158 | $ | 2.519 | $ | 14.056 | $ | 8.992 | |||||
Retail Net Flows | 1.347 | 1.170 | 7.098 | 3.136 | |||||||||
Institutional In-flows | 4.217 | 2.750 | 14.633 | 11.289 | |||||||||
Institutional Net Flows | 1.930 | 2.095 | 8.861 | 7.178 | |||||||||
Total Deposits and In-flows | 7.375 | 5.269 | 28.689 | 20.281 | |||||||||
Total Net Flows | 3.277 | 3.265 | 15.959 | 10.314 | |||||||||
Assets Under Management- Retail and Inst'l | 77.093 | 56.029 | 77.093 | 56.029 | |||||||||
Assets Under Management - Insurance-related Assets | 44.483 | 43.980 | 44.483 | 43.980 | |||||||||
Assets Under Management - Total Segment | 121.576 | 100.009 | 121.576 | 100.009 | |||||||||
Consolidated | |||||||||||||
Domestic Retail Deposits | $ | 6.188 | $ | 5.290 | $ | 25.494 | $ | 19.280 | |||||
Domestic Retail Account Balances | 122.004 | 103.784 | 122.004 | 103.784 | |||||||||
Domestic Retail Net Flows | 2.348 | 2.527 | 11.207 | 7.335 | |||||||||
Domestic Deposits | 10.386 | 8.038 | 40.041 | 30.479 | |||||||||
Domestic Net Flows | 4.368 | 4.622 | 20.238 | 14.545 | |||||||||
Assets Under Management | 171.718 | 144.340 | 171.718 | 144.340 | |||||||||
Operational Data (excluding Assets Managed by | |||||||||||||
Delaware's London-based International Investment Unit) | |||||||||||||
Investment Management Segment | |||||||||||||
Retail Deposits | $ | 3.158 | $ | 2.519 | $ | 14.056 | $ | 8.987 | |||||
Retail Net Flows | 1.347 | 1.170 | 7.098 | 3.160 | |||||||||
Institutional In-flows | 4.217 | 2.750 | 14.633 | 6.637 | |||||||||
Institutional Net Flows | 1.930 | 2.095 | 8.861 | 3.884 | |||||||||
Total Deposits and In-flows | 7.375 | 5.269 | 28.689 | 15.624 | |||||||||
Total Net Flows | 3.277 | 3.265 | 15.959 | 7.045 | |||||||||
Assets Under Management- Retail and Inst'l | 77.093 | 56.029 | 77.093 | 56.029 | |||||||||
Assets Under Management - Insurance-related Assets | 44.483 | 43.980 | 44.483 | 43.980 | |||||||||
Assets Under Management - Total Segment | 121.576 | 100.009 | 121.576 | 100.009 | |||||||||
Consolidated | |||||||||||||
Domestic Retail Deposits | $ | 6.188 | $ | 5.290 | $ | 25.494 | $ | 19.274 | |||||
Domestic Retail Account Balances | 122.004 | 103.784 | 122.004 | 103.784 | |||||||||
Domestic Retail Net Flows | 2.348 | 2.527 | 11.207 | 7.359 | |||||||||
Domestic Deposits | 10.386 | 8.038 | 40.041 | 25.823 | |||||||||
Domestic Net Flows | 4.368 | 4.622 | 20.238 | 11.274 | |||||||||
Assets Under Management | 171.718 | 144.340 | 171.718 | 144.340 |
12/31/2005 | PAGE 3 | ||||||||||||
Financial Highlights | |||||||||||||
Unaudited [Millions of Dollars, except Common Share Data] | |||||||||||||
For the Quarter Ended | For the Year Ended | ||||||||||||
December 31 | December 31 | ||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||
Amount | Amount | Amount | Amount | ||||||||||
Balance Sheet Assets - End of Period | $ | 124,787.6 | $ | 116,219.3 | $ | 124,787.6 | $ | 116,219.3 | |||||
Shareholders' Equity | |||||||||||||
Beg of Period (including AOCI) | $ | 6,284.4 | $ | 5,970.8 | $ | 6,175.6 | $ | 5,811.6 | |||||
End of Period (including AOCI) | 6,384.4 | 6,175.6 | 6,384.4 | 6,175.6 | |||||||||
End of Period (excluding AOCI) | 5,856.6 | 5,244.9 | 5,856.6 | 5,244.9 | |||||||||
Average Equity (excluding AOCI) | 5,757.7 | 5,185.0 | 5,512.2 | 5,075.5 | |||||||||
Return on Equity | |||||||||||||
Net Income/Average Equity (excluding AOCI) | 15.7 | % | 14.6 | % | 15.1 | % | 13.9 | % | |||||
Inc from Operations/Average Equity (excluding AOCI) | 16.1 | % | 14.7 | % | 15.4 | % | 14.3 | % | |||||
Return on Capital | |||||||||||||
Inc from Operations/Average Capital | 13.5 | % | 12.1 | % | 12.9 | % | 11.7 | % | |||||
Common Stock Outstanding | |||||||||||||
Average for the Period - Diluted | 176.6 | 176.7 | 176.1 | 179.0 | |||||||||
End of Period - Assuming Conv of Pref. | 174.0 | 173.8 | 174.0 | 173.8 | |||||||||
End of Period - Diluted | 176.9 | 176.1 | 176.9 | 176.1 | |||||||||
Book Value (including AOCI) | $ | 36.69 | $ | 35.53 | $ | 36.69 | $ | 35.53 | |||||
Book Value (excluding AOCI) | $ | 33.66 | $ | 30.17 | $ | 33.66 | $ | 30.17 | |||||
Cash Returned to Shareholders | |||||||||||||
Share Repurchase - dollar amount | $ | - | $ | 64.0 | $ | 103.6 | $ | 350.2 | |||||
Dividends Declared to Shareholders | 66.6 | 63.8 | 257.7 | 250.1 | |||||||||
Total Cash Returned to Shareholders | $ | 66.6 | $ | 127.8 | $ | 361.3 | $ | 600.3 | |||||
Share Repurchase - number of shares | - | 1.379 | 2.331 | 7.612 | |||||||||
Dividend Declared on Common Stock - per share | $ | 0.380 | $ | 0.365 | $ | 1.475 | $ | 1.415 | |||||
For the Quarter Ended | For the Year Ended | ||||||||||||
December 31 | December 31 | ||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||
Amount | Amount | Amount | Amount | ||||||||||
Comprehensive Income (Loss) | |||||||||||||
Net Income | $ | 225.3 | $ | 189.9 | $ | 831.1 | $ | 707.0 | |||||
Foreign Currency Translation | (16.1 | ) | 37.4 | (70.9 | ) | 45.3 | |||||||
Net Unrealized Gains (Losses) on Securities | (72.4 | ) | 42.8 | (326.3 | ) | 29.8 | |||||||
Losses on Derivatives | (1.5 | ) | (5.8 | ) | (6.7 | ) | (8.1 | ) | |||||
Minimum Pension Liability Adjustment | (2.9 | ) | (4.8 | ) | 1.0 | (5.4 | ) | ||||||
Comprehensive Income | $ | 132.3 | $ | 259.5 | $ | 428.2 | $ | 768.6 |
12/31/2005 | PAGE 4 | ||||||||||||
Consolidated Statements of Income | |||||||||||||
Unaudited [Millions of Dollars] | |||||||||||||
For the Quarter Ended December 31 | For the Year Ended December 31 | ||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||
Revenue | |||||||||||||
Premiums | $ | 82.4 | $ | 78.7 | $ | 308.4 | $ | 298.9 | |||||
Surrender charges | 18.0 | 21.1 | 73.3 | 78.7 | |||||||||
Mortality assessments | 145.1 | 140.4 | 568.3 | 558.3 | |||||||||
Expense assessments | 308.5 | 258.5 | 1,120.6 | 949.3 | |||||||||
Investment advisory fees | 79.0 | 56.0 | 279.0 | 252.5 | |||||||||
Amortization of deferred gain | 18.9 | 19.1 | 75.7 | 87.0 | |||||||||
Amortization of deferred gain-reserve development | 0.3 | 0.3 | 1.3 | 1.3 | |||||||||
Other revenue and fees | 77.3 | 93.4 | 362.3 | 364.4 | |||||||||
Net investment income | 668.1 | 674.1 | 2,702.3 | 2,704.1 | |||||||||
Realized gains (losses) on investments | (9.6 | ) | 7.2 | (21.7 | ) | (45.7 | ) | ||||||
Gains (losses) on derivatives | 0.2 | (0.4 | ) | (0.5 | ) | (11.6 | ) | ||||||
Net gain (loss) on reinsurance | |||||||||||||
derivative/trading account securities | 0.0 | (1.4 | ) | 4.7 | (1.0 | ) | |||||||
Gain on sale of subsidiaries/ businesses | - | 0.6 | 14.2 | 135.0 | |||||||||
Total Revenue | 1,388.4 | 1,347.5 | 5,487.9 | 5,371.3 | |||||||||
Benefits and Expenses | |||||||||||||
Ins. benefits paid or provided: | |||||||||||||
Policy benefits | 179.5 | 171.4 | 761.6 | 696.2 | |||||||||
Div accum & div to policyholders | 23.6 | 23.6 | 77.7 | 77.4 | |||||||||
Interest credited to policy bal. | 394.7 | 397.4 | 1,570.1 | 1,570.6 | |||||||||
Def. sales inducements net of amortization | (11.3 | ) | (11.5 | ) | (43.9 | ) | (40.6 | ) | |||||
Total insurance benefits | 586.5 | 580.9 | 2,365.6 | 2,303.7 | |||||||||
Underwriting, acquisition, | |||||||||||||
insurance and other expenses: | |||||||||||||
Commissions and other volume related expenses | 357.2 | 331.3 | 1,287.2 | 1,133.1 | |||||||||
Operating and administrative expenses | 217.3 | 193.1 | 914.1 | 897.4 | |||||||||
Restructuring charges | 1.7 | 0.1 | 29.5 | 21.4 | |||||||||
Taxes, licenses and fees | 17.2 | 21.3 | 95.3 | 103.6 | |||||||||
Subtotal | 593.4 | 545.8 | 2,326.1 | 2,155.5 | |||||||||
DAC deferral net of amortization | (125.4 | ) | (84.9 | ) | (442.1 | ) | (354.1 | ) | |||||
PVIF amortization | 13.6 | 24.2 | 67.2 | 120.3 | |||||||||
Other intangibles amortization | 2.0 | 3.8 | 7.8 | 9.7 | |||||||||
Total underwriting, acquisition, | |||||||||||||
insurance and other expenses | 483.6 | 488.9 | 1,959.0 | 1,931.5 | |||||||||
Interest | 22.4 | 22.2 | 88.7 | 94.1 | |||||||||
Loss on early retirement of debt | 6.3 | 6.3 | |||||||||||
Total Benefits and Expenses | 1,092.5 | 1,098.4 | 4,413.3 | 4,335.6 | |||||||||
Income (Loss) Before Federal Income Tax and | |||||||||||||
Cumulative Effect of Accounting Change | 295.9 | 249.1 | 1,074.6 | 1,035.7 | |||||||||
Federal income taxes | 70.6 | 59.2 | 243.6 | 304.1 | |||||||||
Income Before Cumulative Effect of | |||||||||||||
Accounting Change | 225.3 | 189.9 | 831.1 | 731.5 | |||||||||
Cumulative effect of accounting change | - | - | - | (24.5 | ) | ||||||||
Net Income | $ | 225.3 | $ | 189.9 | $ | 831.1 | $ | 707.0 | |||||
Roll Forward of Deferred Acquisition Costs | |||||||||||||
Balance at beginning of period | $ | 3,904.0 | $ | 3,326.8 | $ | 3,445.0 | $ | 3,147.1 | |||||
Deferral | 253.5 | 238.1 | 903.2 | 844.8 | |||||||||
Amortization | (128.1 | ) | (153.2 | ) | (461.1 | ) | (490.8 | ) | |||||
Included in Total Benefits and Expenses | 125.4 | 84.9 | 442.1 | 354.1 | |||||||||
Adjustment related to realized (gains) losses | |||||||||||||
on available-for-sale securities | (8.7 | ) | (15.8 | ) | (48.5 | ) | (45.7 | ) | |||||
Adjustment related to unrealized (gains) losses | |||||||||||||
on available-for-sale securities | 84.7 | 14.7 | 313.1 | (14.8 | ) | ||||||||
Foreign currency translation adjustment | (13.2 | ) | 33.8 | (59.5 | ) | 42.9 | |||||||
Other | - | 0.5 | - | (38.7 | ) | ||||||||
Balance at end of period | $ | 4,092.2 | $ | 3,445.0 | $ | 4,092.2 | $ | 3,445.0 | |||||
Roll Forward of Present Value of In-Force | |||||||||||||
Balance at beginning of period | $ | 1,019.4 | $ | 1,103.9 | $ | 1,095.2 | $ | 1,196.5 | |||||
Amortization | (13.6 | ) | (24.2 | ) | (67.2 | ) | (120.3 | ) | |||||
Foreign currency translation adjustment | (6.9 | ) | 15.6 | (29.0 | ) | 19.6 | |||||||
Other | - | - | - | (0.6 | ) | ||||||||
Balance at end of period | $ | 998.9 | $ | 1,095.2 | $ | 998.9 | $ | 1,095.2 | |||||
Roll Forward of Deferred Front-End Load* | |||||||||||||
Balance at beginning of period | $ | 721.2 | $ | 744.4 | $ | 764.1 | $ | 750.6 | |||||
Deferral | 23.7 | 28.6 | 89.1 | 104.6 | |||||||||
Amortization | (11.9 | ) | (34.0 | ) | (85.8 | ) | (122.8 | ) | |||||
Included in Income from Operations | 11.8 | (5.3 | ) | 3.3 | (18.2 | ) | |||||||
Foreign currency translation adjustment | (9.5 | ) | 25.0 | (43.9 | ) | 31.7 | |||||||
Balance at end of period | $ | 723.6 | $ | 764.1 | $ | 723.6 | $ | 764.1 | |||||
* Included in Insurance and Investment Contract Liabilities on the Balance Sheet |
12/31/2005 | PAGE 5 | ||||||||||||||||||||||||
Consolidating Statements of Income from Operations | |||||||||||||||||||||||||
Unaudited [Millions of Dollars] | |||||||||||||||||||||||||
Investment | |||||||||||||||||||||||||
For the Quarter Ended December 31 | Lincoln Retirement | Life Insurance | Management | Lincoln UK | |||||||||||||||||||||
Dec | Dec | Dec | Dec | Dec | Dec | Dec | Dec | ||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||||||||
Premiums | $ | 9.2 | $ | 9.9 | $ | 57.8 | $ | 53.6 | $ | - | $ | - | $ | 15.4 | $ | 14.9 | |||||||||
Surrender charges | 5.9 | 6.4 | 11.6 | 14.2 | 0.5 | 0.5 | - | - | |||||||||||||||||
Mortality assessments | - | - | 137.8 | 130.5 | - | - | 7.3 | 9.8 | |||||||||||||||||
Expense assessments | 199.6 | 157.1 | 62.3 | 58.0 | 17.6 | 15.5 | 29.1 | 28.3 | |||||||||||||||||
Investment advisory fees | - | - | - | - | 103.5 | 82.8 | - | - | |||||||||||||||||
Other revenue and fees | (1.9 | ) | (2.0 | ) | 8.9 | 8.1 | 17.8 | 16.7 | (7.1 | ) | 16.0 | ||||||||||||||
Net investment income | 360.6 | 368.0 | 241.2 | 239.4 | 13.2 | 12.3 | 17.8 | 20.2 | |||||||||||||||||
Total Operating Revenue | 573.3 | 539.4 | 519.6 | 503.7 | 152.7 | 127.7 | 62.5 | 89.3 | |||||||||||||||||
Operating Expenses | |||||||||||||||||||||||||
Ins. benefits paid or provided: | |||||||||||||||||||||||||
Policy benefits | 49.9 | 43.4 | 102.1 | 106.4 | - | - | 27.5 | 21.3 | |||||||||||||||||
Div accum & div to policyholders | - | - | 23.6 | 23.6 | - | - | - | - | |||||||||||||||||
Interest credited to policy bal. | 202.9 | 210.4 | 150.2 | 147.1 | 7.1 | 6.8 | - | - | |||||||||||||||||
Def. sales inducements net of amortization | (11.3 | ) | (11.5 | ) | - | - | - | - | - | - | |||||||||||||||
Total insurance benefits | 241.6 | 242.2 | 275.9 | 277.2 | 7.1 | 6.8 | 27.5 | 21.3 | |||||||||||||||||
Underwriting, acquisition, | |||||||||||||||||||||||||
insurance and other expenses: | |||||||||||||||||||||||||
Commissions and other volume related expenses | 162.8 | 156.7 | 109.2 | 99.4 | 15.9 | 11.7 | 0.1 | 1.0 | |||||||||||||||||
Operating and administrative expenses | 69.8 | 59.6 | 43.3 | 42.9 | 109.5 | 100.2 | 24.2 | 14.1 | |||||||||||||||||
Taxes, licenses and fees | 1.5 | 2.5 | 14.7 | 12.5 | 2.8 | 3.1 | 0.0 | - | |||||||||||||||||
Subtotal | 234.0 | 218.8 | 167.3 | 154.7 | 128.2 | 114.9 | 24.3 | 15.1 | |||||||||||||||||
Net DAC (deferral) amortization | (58.0 | ) | (49.0 | ) | (56.1 | ) | (54.0 | ) | (3.9 | ) | (3.9 | ) | (7.4 | ) | 21.9 | ||||||||||
PVIF amortization | 2.4 | 2.3 | 13.8 | 16.4 | - | - | (2.5 | ) | 5.6 | ||||||||||||||||
Other intangibles amortization | - | - | - | - | 2.0 | 3.8 | - | - | |||||||||||||||||
Total underwriting, acquisition, | |||||||||||||||||||||||||
insurance and other expenses | 178.4 | 172.1 | 124.9 | 117.1 | 126.3 | 114.8 | 14.3 | 42.5 | |||||||||||||||||
Total Operating Expenses | 420.0 | 414.3 | 400.8 | 394.3 | 133.3 | 121.7 | 41.8 | 63.8 | |||||||||||||||||
Income from Operations before federal taxes | 153.4 | 125.1 | 118.8 | 109.5 | 19.4 | 6.0 | 20.7 | 25.5 | |||||||||||||||||
Federal income taxes | 36.1 | 24.7 | 38.6 | 35.5 | 4.8 | 0.8 | 7.2 | 8.9 | |||||||||||||||||
Income from Operations | $ | 117.3 | $ | 100.5 | $ | 80.2 | $ | 74.0 | $ | 14.6 | $ | 5.2 | $ | 13.5 | $ | 16.6 |
12/31/2005 | PAGE 5A | ||||||||||||||||||
Consolidating Statements of Income from Operations | |||||||||||||||||||
Unaudited [Millions of Dollars] | |||||||||||||||||||
Corporate and | Consolidating | ||||||||||||||||||
For the Quarter Ended December 31 | Other Operations | Adjustments | Consolidated * | ||||||||||||||||
Dec | Dec | Dec | Dec | Dec | Dec | ||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||
Operating Revenue | |||||||||||||||||||
Premiums | $ | - | $ | 0.3 | $ | - | $ | - | $ | 82.4 | $ | 78.7 | |||||||
Surrender charges | - | - | - | - | 18.0 | 21.1 | |||||||||||||
Mortality assessments | - | - | - | - | 145.1 | 140.4 | |||||||||||||
Expense assessments | - | (0.5 | ) | - | - | 308.5 | 258.5 | ||||||||||||
Investment advisory fees | - | - | (24.5 | ) | (26.8 | ) | 79.0 | 56.0 | |||||||||||
Amortization of deferred gain | 18.9 | 19.1 | - | - | 18.9 | 19.1 | |||||||||||||
Other revenue and fees | 220.7 | 172.4 | (161.1 | ) | (117.7 | ) | 77.3 | 93.4 | |||||||||||
Net investment income | 36.5 | 34.8 | (1.3 | ) | (0.6 | ) | 668.1 | 674.1 | |||||||||||
Total Operating Revenue | 276.1 | 226.2 | (186.9 | ) | (145.1 | ) | 1,397.4 | 1,341.2 | |||||||||||
Operating Expenses | |||||||||||||||||||
Ins. benefits paid or provided: | |||||||||||||||||||
Policy benefits | (0.0 | ) | 0.4 | - | - | 179.5 | 171.4 | ||||||||||||
Div accum & div to policyholders | - | - | - | - | 23.6 | 23.6 | |||||||||||||
Interest credited to policy bal. | 34.5 | 33.1 | - | - | 394.7 | 397.4 | |||||||||||||
Def. sales inducements net of amortization | - | - | - | - | (11.3 | ) | (11.5 | ) | |||||||||||
Total insurance benefits | 34.4 | 33.4 | - | - | 586.5 | 580.9 | |||||||||||||
Underwriting, acquisition, | |||||||||||||||||||
insurance and other expenses: | |||||||||||||||||||
Commissions and other volume related expenses | 137.8 | 87.7 | (68.6 | ) | (25.2 | ) | 357.2 | 331.3 | |||||||||||
Operating and administrative expenses | 88.4 | 95.8 | (117.3 | ) | (119.3 | ) | 217.9 | 193.2 | |||||||||||
Taxes, licenses and fees | (1.7 | ) | 3.3 | - | - | 17.2 | 21.3 | ||||||||||||
Subtotal | 224.5 | 186.9 | (185.9 | ) | (144.5 | ) | 592.3 | 545.9 | |||||||||||
Net DAC (deferral) amortization | 0.1 | 0.1 | - | - | (125.4 | ) | (84.9 | ) | |||||||||||
PVIF amortization | - | - | - | - | 13.6 | 24.2 | |||||||||||||
Other intangibles amortization | - | - | - | - | 2.0 | 3.8 | |||||||||||||
Total underwriting, acquisition, | |||||||||||||||||||
insurance and other expenses | 224.6 | 186.9 | (185.9 | ) | (144.5 | ) | 482.5 | 489.0 | |||||||||||
Interest | 22.9 | 22.8 | (1.0 | ) | (0.6 | ) | 21.8 | 22.1 | |||||||||||
Foreign exchange adjustment | - | (0.0 | ) | - | - | - | (0.0 | ) | |||||||||||
Total Operating Expenses | 281.8 | 243.1 | (186.9 | ) | (145.1 | ) | 1,090.9 | 1,092.0 | |||||||||||
Income (Loss) from Operations before federal taxes | (5.7 | ) | (16.9 | ) | 306.5 | 249.2 | |||||||||||||
Federal income taxes | (12.5 | ) | (10.6 | ) | 74.3 | 59.3 | |||||||||||||
Income (Loss) from Operations | $ | 6.7 | $ | (6.3 | ) | $ | 232.3 | $ | 189.9 | ||||||||||
* See page 1 for a reconciliation of Income from Operations to consolidated Net Income |
12/31/2005 | PAGE 6 | ||||||||||||||||||||||||
Consolidating Statements of Income from Operations | |||||||||||||||||||||||||
Unaudited [Millions of Dollars] | |||||||||||||||||||||||||
Investment | |||||||||||||||||||||||||
For the Year Ended December 31 | Lincoln Retirement | Life Insurance | Management | Lincoln UK | |||||||||||||||||||||
Dec | Dec | Dec | Dec | Dec | Dec | Dec | Dec | ||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||||||||
Premiums | $ | 45.7 | $ | 33.0 | $ | 198.7 | $ | 194.0 | $ | - | $ | - | $ | 63.3 | $ | 70.3 | |||||||||
Surrender charges | 27.4 | 25.0 | 43.6 | 51.8 | 2.3 | 1.9 | - | - | |||||||||||||||||
Mortality assessments | - | - | 533.6 | 518.7 | - | - | 34.8 | 39.5 | |||||||||||||||||
Expense assessments | 727.1 | 580.5 | 213.1 | 208.6 | 68.9 | 56.8 | 111.5 | 103.9 | |||||||||||||||||
Investment advisory fees | - | - | - | - | 377.8 | 358.3 | - | - | |||||||||||||||||
Other revenue and fees | (6.2 | ) | (6.3 | ) | 34.0 | 31.4 | 65.8 | 66.2 | 30.3 | 52.8 | |||||||||||||||
Net investment income | 1,463.9 | 1,495.9 | 970.7 | 948.4 | 53.0 | 51.7 | 78.6 | 75.7 | |||||||||||||||||
Total Operating Revenue | 2,258.0 | 2,128.0 | 1,993.5 | 1,952.9 | 567.8 | 534.9 | 318.4 | 342.2 | |||||||||||||||||
Operating Expenses | |||||||||||||||||||||||||
Ins. benefits paid or provided: | |||||||||||||||||||||||||
Policy benefits | 223.0 | 189.9 | 422.3 | 404.1 | - | - | 116.0 | 100.4 | |||||||||||||||||
Div accum & div to policyholders | - | - | 77.7 | 77.4 | - | - | - | - | |||||||||||||||||
Interest credited to policy bal. | 819.0 | 836.0 | 590.2 | 579.7 | 27.9 | 26.9 | - | - | |||||||||||||||||
Def. sales inducements net of amortization | (43.9 | ) | (40.6 | ) | - | - | - | - | - | - | |||||||||||||||
Total insurance benefits | 998.1 | 985.2 | 1,090.3 | 1,061.2 | 27.9 | 26.9 | 116.0 | 100.4 | |||||||||||||||||
Underwriting, acquisition, | |||||||||||||||||||||||||
insurance and other expenses: | |||||||||||||||||||||||||
Commissions and other volume related expenses | 626.3 | 586.7 | 362.6 | 331.1 | 60.1 | 53.0 | 2.3 | 2.9 | |||||||||||||||||
Operating and administrative expenses | 259.2 | 231.8 | 176.4 | 168.6 | 430.3 | 392.9 | 98.3 | 81.0 | |||||||||||||||||
Taxes, licenses and fees | 10.5 | 14.6 | 53.9 | 49.1 | 10.7 | 17.0 | 0.0 | - | |||||||||||||||||
Subtotal | 895.9 | 833.1 | 592.9 | 548.9 | 501.1 | 462.9 | 100.6 | 83.9 | |||||||||||||||||
Net DAC (deferral) amortization | (275.8 | ) | (247.9 | ) | (191.9 | ) | (152.2 | ) | (19.8 | ) | (27.1 | ) | 45.1 | 72.8 | |||||||||||
PVIF amortization | 16.6 | 20.0 | 60.6 | 82.2 | - | - | (10.1 | ) | 18.1 | ||||||||||||||||
Other intangibles amortization | - | - | - | - | 7.8 | 9.7 | - | - | |||||||||||||||||
Total underwriting, acquisition, | |||||||||||||||||||||||||
insurance and other expenses | 636.7 | 605.2 | 461.6 | 478.9 | 489.0 | 445.5 | 135.7 | 174.8 | |||||||||||||||||
Total Operating Expenses | 1,634.8 | 1,590.5 | 1,551.9 | 1,540.0 | 516.9 | 472.5 | 251.7 | 275.2 | |||||||||||||||||
Income from Operations before federal taxes | 623.2 | 537.6 | 441.6 | 412.9 | 50.9 | 62.4 | 66.7 | 67.0 | |||||||||||||||||
Federal income taxes | 151.7 | 123.0 | 142.7 | 132.6 | 14.9 | 18.9 | 23.4 | 23.4 | |||||||||||||||||
Income from Operations | $ | 471.5 | $ | 414.6 | $ | 298.9 | $ | 280.3 | $ | 36.0 | $ | 43.6 | $ | 43.4 | $ | 43.5 |
12/31/2005 | PAGE 6A | ||||||||||||||||||
Consolidating Statements of Income from Operations | |||||||||||||||||||
Unaudited [Millions of Dollars] | |||||||||||||||||||
Corporate and | Consolidating | ||||||||||||||||||
For the Year Ended December 31 | Other Operations | Adjustments | Consolidated * | ||||||||||||||||
Dec | Dec | Dec | Dec | Dec | Dec | ||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||
Operating Revenue | |||||||||||||||||||
Premiums | $ | 0.7 | $ | 1.6 | $ | - | $ | - | $ | 308.4 | $ | 298.9 | |||||||
Surrender charges | - | - | - | - | 73.3 | 78.7 | |||||||||||||
Mortality assessments | - | - | - | - | 568.3 | 558.3 | |||||||||||||
Expense assessments | - | (0.5 | ) | - | - | 1,120.6 | 949.3 | ||||||||||||
Investment advisory fees | - | - | (98.8 | ) | (105.8 | ) | 279.0 | 252.5 | |||||||||||
Amortization of deferred gain | 75.7 | 87.0 | - | - | 75.7 | 87.0 | |||||||||||||
Other revenue and fees | 803.0 | 629.9 | (564.7 | ) | (409.6 | ) | 362.3 | 364.4 | |||||||||||
Net investment income | 140.4 | 134.4 | (4.2 | ) | (1.8 | ) | 2,702.3 | 2,704.1 | |||||||||||
Total Operating Revenue | 1,019.8 | 852.3 | (667.7 | ) | (517.2 | ) | 5,489.8 | 5,293.2 | |||||||||||
Operating Expenses | |||||||||||||||||||
Ins. benefits paid or provided: | |||||||||||||||||||
Policy benefits | 0.3 | 1.9 | - | - | 761.6 | 696.2 | |||||||||||||
Div accum & div to policyholders | - | - | - | - | 77.7 | 77.4 | |||||||||||||
Interest credited to policy bal. | 133.0 | 128.0 | - | - | 1,570.1 | 1,570.6 | |||||||||||||
Def. sales inducements net of amortization | - | - | - | - | (43.9 | ) | (40.6 | ) | |||||||||||
Total insurance benefits | 133.3 | 129.9 | - | - | 2,365.6 | 2,303.7 | |||||||||||||
Underwriting, acquisition, | |||||||||||||||||||
insurance and other expenses: | |||||||||||||||||||
Commissions and other volume related expenses | 501.3 | 317.2 | (265.3 | ) | (157.8 | ) | 1,287.2 | 1,133.1 | |||||||||||
Operating and administrative expenses | 350.5 | 380.9 | (399.2 | ) | (357.6 | ) | 915.5 | 897.5 | |||||||||||
Taxes, licenses and fees | 20.1 | 22.8 | - | - | 95.3 | 103.6 | |||||||||||||
Subtotal | 872.0 | 720.9 | (664.5 | ) | (515.4 | ) | 2,298.0 | 2,134.3 | |||||||||||
Net DAC (deferral) amortization | 0.4 | 0.4 | - | - | (442.1 | ) | (354.1 | ) | |||||||||||
PVIF amortization | - | - | - | - | 67.2 | 120.3 | |||||||||||||
Other intangibles amortization | - | - | - | - | 7.8 | 9.7 | |||||||||||||
Total underwriting, acquisition, | |||||||||||||||||||
insurance and other expenses | 872.4 | 721.3 | (664.5 | ) | (515.4 | ) | 1,930.9 | 1,910.2 | |||||||||||
Interest | 90.5 | 95.9 | (3.2 | ) | (1.8 | ) | 87.3 | 94.0 | |||||||||||
Foreign Exchange | - | - | - | - | - | - | |||||||||||||
Total Operating Expenses | 1,096.2 | 947.0 | (667.7 | ) | (517.2 | ) | 4,383.8 | 4,307.9 | |||||||||||
Income (Loss) from Operations before federal taxes | (76.4 | ) | (94.7 | ) | - | - | 1,106.1 | 985.2 | |||||||||||
Federal income taxes | (78.1 | ) | (37.4 | ) | - | - | 254.5 | 260.5 | |||||||||||
Income (Loss) from Operations | $ | 1.8 | $ | (57.2 | ) | $ | - | $ | - | $ | 851.6 | $ | 724.8 | ||||||
* See page 1 for a reconciliation of Income from Operations to consolidated Net Income |
12/31/2005 | PAGE 7 | ||||||
Comparative Balance Sheet | |||||||
Unaudited [Millions of Dollars except Common Share Data] | |||||||
ASSETS | 2005 | 2004 | |||||
Investments | |||||||
Corporate bonds | $ | 25,860.7 | $ | 26,889.0 | |||
U.S. government bonds | 161.8 | 163.0 | |||||
Foreign government bonds | 1,203.3 | 1,285.9 | |||||
Mortgage backed securities | 5,951.2 | 6,090.5 | |||||
State and municipal bonds | 128.8 | 166.0 | |||||
Preferred stocks-redeemable | 137.4 | 106.1 | |||||
Common stocks | 55.9 | 69.8 | |||||
Preferred stocks-equity | 88.8 | 91.3 | |||||
Total AFS Securities | 33,587.9 | 34,861.7 | |||||
Trading securities | 3,246.0 | 3,237.4 | |||||
Mortgage loans | 3,662.6 | 3,856.9 | |||||
Real estate | 182.7 | 191.4 | |||||
Policy loans | 1,862.2 | 1,870.6 | |||||
Other long-term investments | 626.9 | 489.3 | |||||
Total Investments | 43,168.4 | 44,507.3 | |||||
Cash and invested cash | 2,311.7 | 1,661.7 | |||||
Premiums and fees receivable | 343.2 | 232.9 | |||||
Accrued investment income | 526.4 | 525.1 | |||||
Amounts recoverable from reinsurers | 6,926.3 | 7,067.5 | |||||
Deferred acquisition costs | 4,092.2 | 3,445.0 | |||||
Other intangible assets | 143.3 | 106.4 | |||||
Present value of in-force | 998.9 | 1,095.2 | |||||
Goodwill | 1,194.2 | 1,195.9 | |||||
Other | 1,336.0 | 1,177.6 | |||||
Assets held in separate accounts | 63,746.8 | 55,204.6 | |||||
Total Assets | $ | 124,787.6 | $ | 116,219.3 | |||
LIABILITIES and SHAREHOLDERS' EQUITY | |||||||
Liabilities | |||||||
Insurance and Investment Contract Liabilities: | |||||||
Reserves | $ | 23,609.2 | $ | 23,242.1 | |||
Unpaid claims | 1,040.8 | 1,080.3 | |||||
Unearned premiums | 2.1 | 5.8 | |||||
Premium deposit funds | 21,713.3 | 22,215.1 | |||||
Participating policyholders' funds | 111.2 | 145.3 | |||||
Other policyholders' funds | 746.1 | 714.0 | |||||
Total Ins and Inv Contr Liabilities | 47,222.8 | 47,402.5 | |||||
Federal income tax liabilities | 19.8 | 77.6 | |||||
Short-term debt | 119.9 | 214.4 | |||||
Long-term debt | 999.0 | 1,048.6 | |||||
Junior subordinated debentures issued to affiliated trusts | 334.0 | 339.8 | |||||
Embedded derivative - modco | 292.2 | 375.3 | |||||
Other liabilities | 4,832.8 | 4,467.8 | |||||
Deferred gain on indemnity reinsurance | 836.0 | 913.0 | |||||
Liability related to separate accounts | 63,746.8 | 55,204.6 | |||||
Total Liabilities | 118,403.2 | 110,043.7 | |||||
Unrealized gains | 503.9 | 836.9 | |||||
Foreign currency | 83.4 | 154.3 | |||||
Minimum pension liability adjustment | (59.5 | ) | (60.5 | ) | |||
Shareholders' equity- other | 5,856.6 | 5,244.9 | |||||
Total Shareholders' Equity | 6,384.4 | 6,175.6 | |||||
Total Liabilities | |||||||
and Shareholders' Equity | $ | 124,787.6 | $ | 116,219.3 | |||
Shareholders' Equity Per Share | |||||||
Book Value, Excluding AOCI | $ | 33.66 | $ | 30.17 | |||
Common shares outstanding (in millions) | 174.0 | 173.8 |
12/31/2005 | PAGE 8 | ||||||||||||||||||||||||
Consolidating Balance Sheets | |||||||||||||||||||||||||
Unaudited [Millions of Dollars] | |||||||||||||||||||||||||
Investment | |||||||||||||||||||||||||
Lincoln Retirement | Life Insurance | Management | Lincoln UK | ||||||||||||||||||||||
ASSETS | Dec | Dec | Dec | Dec | Dec | Dec | Dec | Dec | |||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||||
Investments | |||||||||||||||||||||||||
Corporate bonds | $ | 12,688.1 | $ | 13,504.1 | $ | 9,038.9 | $ | 8,887.9 | $ | 515.9 | $ | 533.3 | $ | 646.7 | $ | 739.2 | |||||||||
U.S. government bonds | 11.3 | 11.9 | 71.0 | 63.8 | - | - | - | - | |||||||||||||||||
Foreign government bonds | 275.9 | 304.5 | 176.6 | 184.7 | 6.8 | 6.8 | 302.2 | 337.6 | |||||||||||||||||
Asset/mortgage backed securities | 3,277.3 | 3,332.3 | 1,901.1 | 1,739.5 | 91.9 | 99.6 | - | - | |||||||||||||||||
State and municipal bonds | 67.2 | 95.3 | 42.7 | 52.4 | 1.1 | 1.2 | - | - | |||||||||||||||||
Preferred stocks-redeemable | 61.2 | 37.6 | 28.4 | 25.7 | - | - | - | - | |||||||||||||||||
Common stocks | - | 0.2 | 0.0 | 0.2 | - | - | 43.0 | 46.4 | |||||||||||||||||
Preferred stocks-equity | 42.2 | 43.1 | 14.2 | 14.8 | 2.7 | 2.7 | - | - | |||||||||||||||||
Total AFS Securities | 16,423.1 | 17,329.1 | 11,273.0 | 10,968.9 | 618.4 | 643.7 | 991.9 | 1,123.3 | |||||||||||||||||
Trading Securities | 1,130.6 | 1,169.6 | - | - | - | - | - | - | |||||||||||||||||
Mortgage loans | 1,720.6 | 1,936.3 | 1,621.4 | 1,554.2 | 44.1 | 62.6 | 0.0 | 0.1 | |||||||||||||||||
Real estate | - | - | - | - | - | - | 0.2 | 0.2 | |||||||||||||||||
Policy loans | 431.7 | 438.7 | 1,426.0 | 1,426.0 | - | - | 4.4 | 5.9 | |||||||||||||||||
Allocated investments | 3,645.9 | 3,891.1 | 1,545.0 | 1,442.7 | 159.5 | 139.9 | - | - | |||||||||||||||||
Other long-term investments | 155.0 | 61.8 | 3.3 | 9.1 | - | - | - | - | |||||||||||||||||
Total Investments | 23,507.0 | 24,826.6 | 15,868.8 | 15,400.9 | 822.1 | 846.3 | 996.6 | 1,129.5 | |||||||||||||||||
Notes receivable from LNC | 423.3 | 107.8 | 56.8 | 130.7 | 76.3 | 44.4 | - | - | |||||||||||||||||
Cash and invested cash | (113.3 | ) | (73.9 | ) | (40.7 | ) | 18.0 | 95.3 | 51.1 | 245.5 | 282.9 | ||||||||||||||
Premium and fees receivable | (0.0 | ) | 0.2 | 32.3 | 25.8 | 56.7 | 45.4 | - | - | ||||||||||||||||
Accrued investment income | 236.5 | 243.3 | 179.2 | 173.8 | 8.2 | 8.6 | 20.2 | 22.1 | |||||||||||||||||
Amount recoverable from reinsurers | 937.2 | 1,030.7 | 1,273.0 | 1,183.4 | - | - | 59.9 | - | |||||||||||||||||
Deferred acquisition costs | 1,480.5 | 1,040.4 | 1,970.0 | 1,691.9 | 154.5 | 120.4 | 486.3 | 590.9 | |||||||||||||||||
Other intangible assets | 129.4 | 85.5 | - | - | 13.9 | 20.9 | - | - | |||||||||||||||||
Present value of in-force | 76.0 | 92.6 | 665.8 | 726.5 | - | - | 257.2 | 276.1 | |||||||||||||||||
Goodwill | 64.1 | 64.1 | 855.1 | 855.1 | 260.8 | 260.8 | 14.3 | 15.9 | |||||||||||||||||
Other | 183.0 | 145.2 | 507.9 | 468.0 | 127.3 | 96.4 | 113.9 | 80.3 | |||||||||||||||||
Assets held in separate accounts | 48,182.0 | 40,990.1 | 2,482.7 | 2,131.1 | 5,762.5 | 4,897.2 | 7,319.6 | 7,186.2 | |||||||||||||||||
Total Assets | $ | 75,105.6 | $ | 68,552.7 | $ | 23,850.9 | $ | 22,805.0 | $ | 7,377.6 | $ | 6,391.5 | $ | 9,513.3 | $ | 9,583.9 | |||||||||
Corporate and | Consolidating | ||||||||||||||||||||||||
Other Operations | Adjustments | Consolidated | |||||||||||||||||||||||
ASSETS | Dec | Dec | Dec | Dec | Dec | Dec | |||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||||||
Investments | |||||||||||||||||||||||||
Corporate bonds | $ | 2,971.1 | $ | 3,224.5 | $ | - | $ | - | $ | 25,860.7 | $ | 26,889.0 | |||||||||||||
U.S. government bonds | 79.5 | 87.4 | - | - | 161.8 | 163.0 | |||||||||||||||||||
Foreign government bonds | 441.8 | 452.3 | - | - | 1,203.3 | 1,285.9 | |||||||||||||||||||
Asset/mortgage backed securities | 680.9 | 919.0 | - | - | 5,951.2 | 6,090.5 | |||||||||||||||||||
State and municipal bonds | 17.7 | 17.1 | - | - | 128.8 | 166.0 | |||||||||||||||||||
Preferred stocks-redeemable | 47.9 | 42.8 | - | - | 137.4 | 106.1 | |||||||||||||||||||
Common stocks | 13.0 | 22.9 | - | - | 55.9 | 69.8 | |||||||||||||||||||
Preferred stocks-equity | 29.6 | 30.7 | - | - | 88.8 | 91.3 | |||||||||||||||||||
Total AFS Securities | 4,281.4 | 4,796.7 | - | - | 33,587.9 | 34,861.7 | |||||||||||||||||||
Trading securities | 2,115.4 | 2,067.8 | - | - | 3,246.0 | 3,237.4 | |||||||||||||||||||
Mortgage loans | 276.5 | 303.6 | - | - | 3,662.6 | 3,856.9 | |||||||||||||||||||
Real estate | 182.5 | 191.1 | - | - | 182.7 | 191.4 | |||||||||||||||||||
Policy loans | - | - | - | - | 1,862.2 | 1,870.6 | |||||||||||||||||||
Allocated investments | (5,350.5 | ) | (5,473.7 | ) | - | - | - | - | |||||||||||||||||
Other long-term investments | 468.6 | 418.4 | - | - | 626.9 | 489.3 | |||||||||||||||||||
Total Investments | 1,974.0 | 2,304.0 | (0.0 | ) | (0.0 | ) | 43,168.4 | 44,507.3 | |||||||||||||||||
Investments In Consolidated Subs | 6,077.7 | 5,545.6 | (6,077.7 | ) | (5,545.6 | ) | - | - | |||||||||||||||||
Notes receivable from LNC | (521.6 | ) | (152.9 | ) | (34.8 | ) | (130.0 | ) | - | - | |||||||||||||||
Cash and invested cash | 2,124.9 | 1,383.6 | - | - | 2,311.7 | 1,661.7 | |||||||||||||||||||
Premium and fees receivable | 254.3 | 161.5 | - | - | 343.2 | 232.9 | |||||||||||||||||||
Accrued investment income | 82.2 | 77.4 | - | - | 526.4 | 525.1 | |||||||||||||||||||
Amount recoverable from reinsurers | 4,656.2 | 4,853.5 | - | - | 6,926.3 | 7,067.5 | |||||||||||||||||||
Deferred acquisition costs | 1.0 | 1.4 | - | - | 4,092.2 | 3,445.0 | |||||||||||||||||||
Other intangible assets | - | - | - | - | 143.3 | 106.4 | |||||||||||||||||||
Present value of in-force | - | - | - | - | 998.9 | 1,095.2 | |||||||||||||||||||
Goodwill | - | - | - | - | 1,194.2 | 1,195.9 | |||||||||||||||||||
Other | 414.8 | 398.8 | (10.9 | ) | (11.0 | ) | 1,336.1 | 1,177.7 | |||||||||||||||||
Assets held in separate accounts | - | - | - | - | 63,746.8 | 55,204.6 | |||||||||||||||||||
Total Assets | $ | 15,063.7 | $ | 14,572.8 | $ | (6,123.5 | ) | $ | (5,686.7 | ) | $ | 124,787.6 | $ | 116,219.3 |
12/31/2005 | PAGE 9 | ||||||||||||||||||||||||
Consolidating Balance Sheets | |||||||||||||||||||||||||
Unaudited [Millions of Dollars] | |||||||||||||||||||||||||
Investment | |||||||||||||||||||||||||
Lincoln Retirement | Life Insurance | Management | Lincoln UK | ||||||||||||||||||||||
LIABILITIES and SHAREHOLDERS' EQUITY | Dec | Dec | Dec | Dec | Dec | Dec | Dec | Dec | |||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||||
Liabilities | |||||||||||||||||||||||||
Insurance and Inv Contract Liabilities: | |||||||||||||||||||||||||
Reserves | $ | 2,251.7 | $ | 2,268.9 | $ | 16,149.7 | $ | 15,411.7 | $ | - | $ | - | $ | 1,332.0 | $ | 1,491.8 | |||||||||
Unpaid claims | 29.0 | 38.4 | 129.5 | 158.0 | - | - | 44.8 | 51.9 | |||||||||||||||||
Unearned premiums | - | - | - | - | - | - | - | - | |||||||||||||||||
Premium deposit funds | 20,816.8 | 21,336.8 | 17.3 | 17.1 | 739.9 | 716.0 | 31.9 | 29.7 | |||||||||||||||||
Participating policyholders' funds | - | - | 111.2 | 145.3 | - | - | - | - | |||||||||||||||||
Other policyholders' funds | - | - | 741.1 | 706.1 | - | - | - | - | |||||||||||||||||
Total Insurance and Inv Contract Liabilities | 23,097.6 | 23,644.0 | 17,148.9 | 16,438.2 | 739.9 | 716.0 | 1,408.6 | 1,573.5 | |||||||||||||||||
Federal income taxes | 284.3 | 387.0 | 92.9 | 208.3 | 11.8 | 6.2 | 86.9 | 58.6 | |||||||||||||||||
Notes payable to LNC | 0.8 | 51.4 | - | - | - | - | - | - | |||||||||||||||||
Embedded derivative - modco | 40.5 | 80.5 | 2.8 | 2.5 | - | - | - | - | |||||||||||||||||
Other liabilities | 154.2 | 157.1 | 498.8 | 520.8 | 308.3 | 227.5 | 209.8 | 215.0 | |||||||||||||||||
Deferred gain on indemnity reinsurance | - | - | - | - | - | - | - | - | |||||||||||||||||
Liability related to separate accounts | 48,182.0 | 40,990.1 | 2,482.7 | 2,131.1 | 5,762.5 | 4,897.2 | 7,319.6 | 7,186.2 | |||||||||||||||||
Total Liabilities | 71,759.4 | 65,310.1 | 20,226.0 | 19,300.9 | 6,822.5 | 5,846.9 | 9,025.0 | 9,033.4 | |||||||||||||||||
Net unrealized gains (losses) on securities | 274.3 | 474.8 | 140.6 | 244.2 | 2.1 | 3.1 | 45.2 | 36.2 | |||||||||||||||||
Net gains (losses) on derivatives | 1.2 | 4.8 | 5.9 | 7.7 | - | - | - | - | |||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | - | 65.8 | 136.4 | |||||||||||||||||
Minimum pension liability adjustment | - | - | - | - | 0.5 | - | (53.3 | ) | (48.6 | ) | |||||||||||||||
Other shareholders' equity | 3,070.7 | 2,762.9 | 3,478.4 | 3,252.3 | 552.4 | 541.5 | 430.6 | 426.6 | |||||||||||||||||
Shareholders' Equity | 3,346.2 | 3,242.5 | 3,624.9 | 3,504.1 | 555.1 | 544.6 | 488.3 | 550.6 | |||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 75,105.6 | $ | 68,552.7 | $ | 23,850.9 | $ | 22,805.0 | $ | 7,377.6 | $ | 6,391.5 | $ | 9,513.3 | $ | 9,583.9 | |||||||||
Corporate and | Consolidating | ||||||||||||||||||||||||
Other Operations | Adjustments | Consolidated | |||||||||||||||||||||||
LIABILITIES and SHAREHOLDERS' EQUITY | Dec | Dec | Dec | Dec | Dec | Dec | |||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||
Insurance and Inv Contract Liabilities: | |||||||||||||||||||||||||
Reserves | $ | 3,875.9 | $ | 4,069.7 | $ | - | $ | - | $ | 23,609.2 | $ | 23,242.1 | |||||||||||||
Unpaid claims | 837.5 | 832.0 | - | - | 1,040.8 | 1,080.3 | |||||||||||||||||||
Unearned premiums | 2.1 | 5.7 | - | - | 2.1 | 5.8 | |||||||||||||||||||
Premium deposit funds | 107.4 | 115.6 | - | - | 21,713.3 | 22,215.1 | |||||||||||||||||||
Participating policyholders' funds | - | - | - | - | 111.2 | 145.3 | |||||||||||||||||||
Other policyholders' funds | 5.0 | 7.9 | - | - | 746.1 | 714.0 | |||||||||||||||||||
Total Insurance and Inv Contract Liabilities | 4,827.8 | 5,030.9 | - | - | 47,222.8 | 47,402.5 | |||||||||||||||||||
Federal income taxes | (456.2 | ) | (583.3 | ) | - | 0.8 | 19.8 | 77.6 | |||||||||||||||||
Short-term debt | 119.9 | 214.4 | - | - | 119.9 | 214.4 | |||||||||||||||||||
Long-term debt | 999.0 | 1,048.6 | - | - | 999.0 | 1,048.6 | |||||||||||||||||||
Junior subordinated debentures issued to affiliated trusts | 334.0 | 339.8 | - | - | 334.0 | 339.8 | |||||||||||||||||||
Notes payable to LNC | 33.9 | 78.6 | (34.8 | ) | (130.0 | ) | - | - | |||||||||||||||||
Embedded derivative - modco | 248.9 | 292.3 | - | - | 292.2 | 375.3 | |||||||||||||||||||
Other liabilities | 3,672.6 | 3,358.4 | (10.9 | ) | (11.0 | ) | 4,832.8 | 4,467.8 | |||||||||||||||||
Deferred gain on indemnity reinsurance | 836.0 | 913.0 | - | - | 836.0 | 913.0 | |||||||||||||||||||
Liability related to separate accounts | (0.0 | ) | - | - | - | 63,746.8 | 55,204.6 | ||||||||||||||||||
Total Liabilities | 10,615.9 | 10,692.7 | (45.7 | ) | (140.3 | ) | 118,403.2 | 110,043.7 | |||||||||||||||||
Net unrealized gains (losses) on securities | 35.8 | 64.4 | (1.4 | ) | - | 496.6 | 822.9 | ||||||||||||||||||
Gains (losses) on derivatives | 0.2 | 1.6 | - | - | 7.3 | 14.0 | |||||||||||||||||||
Foreign currency translation adjustment | 10.1 | 10.4 | 7.5 | 7.5 | 83.4 | 154.3 | |||||||||||||||||||
Minimum pension liability adjustment | (6.7 | ) | (11.9 | ) | - | - | (59.5 | ) | (60.5 | ) | |||||||||||||||
Other shareholders' equity | 4,408.3 | 3,815.5 | (6,083.9 | ) | (5,553.9 | ) | 5,856.6 | 5,244.9 | |||||||||||||||||
Shareholders' Equity | 4,447.8 | 3,880.1 | (6,077.8 | ) | (5,546.4 | ) | 6,384.4 | 6,175.6 | |||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 15,063.7 | $ | 14,572.8 | $ | (6,123.5 | ) | $ | (5,686.7 | ) | $ | 124,787.6 | $ | 116,219.3 |
12/31/2005 | PAGE 10 | ||||||||||||
Lincoln Retirement | |||||||||||||
Account Value Rollforward | |||||||||||||
Unaudited [Billions of Dollars] | |||||||||||||
Fourth Quarter | Full Year | ||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||
Fixed Annuities - Balance at Beginning of Period | $ | 21.319 | $ | 21.633 | $ | 21.565 | $ | 21.220 | |||||
Gross Deposits | 0.696 | 0.732 | 2.947 | 3.110 | |||||||||
Withdrawals & deaths | (0.676 | ) | (0.587 | ) | (2.714 | ) | (2.227 | ) | |||||
Net flows | 0.021 | 0.145 | 0.234 | 0.884 | |||||||||
Transfer from (to) var annuities | (0.460 | ) | (0.429 | ) | (1.548 | ) | (1.395 | ) | |||||
Interest credited | 0.209 | 0.216 | 0.838 | 0.856 | |||||||||
Fixed Annuities-Gross | 21.089 | 21.565 | 21.089 | 21.565 | |||||||||
Reinsurance Ceded | (2.233 | ) | (2.297 | ) | (2.233 | ) | (2.297 | ) | |||||
Fixed Annuities - Balance at End of Period* | $ | 18.856 | $ | 19.268 | $ | 18.856 | $ | 19.268 | |||||
Variable Annuities - Balance at Beginning of Period | $ | 45.059 | $ | 36.268 | $ | 40.362 | $ | 33.930 | |||||
Gross Deposits | 1.720 | 1.433 | 6.296 | 5.082 | |||||||||
Withdrawals & deaths | (1.134 | ) | (0.990 | ) | (4.299 | ) | (3.797 | ) | |||||
Net flows | 0.586 | 0.443 | 1.997 | 1.285 | |||||||||
Transfer from (to) fixed annuities | 0.464 | 0.427 | 1.559 | 1.387 | |||||||||
Invest inc & change in mkt value | 1.493 | 3.224 | 3.683 | 3.760 | |||||||||
Var Annuities - Balance at End of Period** | $ | 47.601 | $ | 40.362 | $ | 47.601 | $ | 40.362 | |||||
Total Annuities - Balance at Beginning of Period | $ | 66.378 | $ | 57.901 | $ | 61.927 | $ | 55.150 | |||||
Gross Deposits | 2.416 | 2.164 | 9.244 | 8.192 | |||||||||
Withdrawals & deaths | (1.809 | ) | (1.576 | ) | (7.013 | ) | (6.023 | ) | |||||
Net flows | 0.607 | 0.588 | 2.231 | 2.169 | |||||||||
Transfers | 0.003 | (0.002 | ) | 0.011 | (0.008 | ) | |||||||
Interest credited & change in mkt value | 1.702 | 3.440 | 4.521 | 4.616 | |||||||||
Total Gross Annuities- Balance at End of Period | 68.690 | 61.927 | 68.690 | 61.927 | |||||||||
Reinsurance Ceded | (2.233 | ) | (2.297 | ) | (2.233 | ) | (2.297 | ) | |||||
Total Annuities (Net of Ceded) - Balance at End of Period | $ | 66.457 | $ | 59.630 | $ | 66.457 | $ | 59.629 | |||||
Alliance Mutual Funds - Balance at Beg of Period*** | $ | 3.672 | $ | 2.430 | $ | 2.861 | $ | 1.856 | |||||
Gross Deposits | 0.223 | 0.223 | 1.066 | 0.828 | |||||||||
Withdrawals & deaths | (0.208 | ) | (0.017 | ) | (0.410 | ) | (0.075 | ) | |||||
Net flows | 0.014 | 0.206 | 0.656 | 0.753 | |||||||||
Transfers | (0.003 | ) | 0.000 | (0.007 | ) | (0.031 | ) | ||||||
Interest credited & change in mkt value | 0.088 | 0.225 | 0.262 | 0.282 | |||||||||
Total Alliance Mutual Funds - Balance at End of Period | $ | 3.772 | $ | 2.861 | $ | 3.772 | $ | 2.861 | |||||
Total Annuities and Alliance Mutual Funds - | |||||||||||||
Balance Beginning of Period | $ | 70.050 | $ | 60.331 | $ | 64.788 | $ | 57.006 | |||||
Gross Deposits | 2.639 | 2.387 | 10.310 | 9.020 | |||||||||
Withdrawals & deaths | (2.018 | ) | (1.593 | ) | (7.423 | ) | (6.098 | ) | |||||
Net flows | 0.621 | 0.794 | 2.887 | 2.922 | |||||||||
Transfers | 0.000 | (0.002 | ) | 0.004 | (0.039 | ) | |||||||
Interest credited & change in mkt value | 1.790 | 3.665 | 4.783 | 4.898 | |||||||||
Total Gross Annuities and Alliance - Balance End of Period | 72.462 | 64.788 | 72.462 | 64.788 | |||||||||
Reinsurance Ceded | (2.233 | ) | (2.297 | ) | (2.233 | ) | (2.297 | ) | |||||
Total Annuities and Alliance Mutual Funds | |||||||||||||
Balance at End of Period - (net of ceded) | $ | 70.229 | $ | 62.491 | $ | 70.229 | $ | 62.491 | |||||
Run-off Group Pension Accounts - Not Included above | 2.737 | 2.906 | 2.737 | 2.906 | |||||||||
Total Retirement Segment Account Values - (net of ceded) | $ | 72.966 | $ | 65.397 | $ | 72.966 | $ | 65.397 | |||||
Var Ann Under Agreement - Included above | 0.216 | 0.266 | 0.216 | 0.266 | |||||||||
Incremental Deposits****: | |||||||||||||
Fixed Annuities Incremental Deposits | $ | 0.642 | $ | 0.718 | $ | 2.828 | $ | 3.046 | |||||
Variable Annuities Incremental Deposits | 1.687 | 1.402 | 6.164 | 4.928 | |||||||||
Total Annuities Incremental Deposits | 2.328 | 2.120 | 8.992 | 7.974 | |||||||||
Total Alliance Mutual Funds Incremental Deposits | 0.223 | 0.223 | 1.066 | 0.828 | |||||||||
Total Annuities and Alliance Mutual Funds | |||||||||||||
Incremental Deposits | $ | 2.551 | $ | 2.342 | $ | 10.058 | $ | 8.802 |
* Includes Fixed Annuity products offered under the Alliance program and the fixed portion of variable annuities. | |||||||||||||
** Excludes the fixed portion of variable annuities. | |||||||||||||
*** Represents amounts attributable to Alliance program mutual fund net flows. Alliance program mutual fund account values are not included in the separate accounts reported on our balance sheet. | |||||||||||||
**** Incremental Deposits represent gross deposits reduced by transfers from other Lincoln Retirement products. |
12/31/2005 | PAGE 11 | ||||||||||||
Lincoln Retirement | |||||||||||||
Account Values | |||||||||||||
Unaudited [Billions of Dollars] | |||||||||||||
Fourth Quarter | Full Year | ||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||
Fixed Annuities - excluding fixed portion of variable contracts | |||||||||||||
Deposits | $ | 0.158 | $ | 0.192 | $ | 0.681 | $ | 1.026 | |||||
Withdrawals | (0.374 | ) | (0.302 | ) | (1.456 | ) | (1.119 | ) | |||||
Net Flows | $ | (0.216 | ) | $ | (0.110 | ) | $ | (0.776 | ) | $ | (0.093 | ) | |
Gross Fixed Contract Account Values | $ | 11.519 | $ | 11.820 | $ | 11.519 | $ | 11.820 | |||||
Reinsurance Ceded | (2.233 | ) | (2.297 | ) | (2.233 | ) | (2.297 | ) | |||||
Net Fixed Contract Account Values | $ | 9.286 | $ | 9.522 | $ | 9.286 | $ | 9.522 | |||||
Fixed Portion of Variable Contracts | |||||||||||||
Deposits | $ | 0.539 | $ | 0.540 | $ | 2.267 | $ | 2.085 | |||||
Withdrawals | (0.302 | ) | (0.284 | ) | (1.257 | ) | (1.108 | ) | |||||
Net Flows | $ | 0.237 | $ | 0.255 | $ | 1.010 | $ | 0.977 | |||||
Fixed Portion of Variable Contract Account Values | $ | 9.570 | $ | 9.746 | $ | 9.570 | $ | 9.746 | |||||
Variable Annuities - including fixed portion of variable contracts | |||||||||||||
Deposits | $ | 2.258 | $ | 1.972 | $ | 8.563 | $ | 7.166 | |||||
Withdrawals | (1.436 | ) | (1.274 | ) | (5.556 | ) | (4.904 | ) | |||||
Net Flows | $ | 0.823 | $ | 0.698 | $ | 3.007 | $ | 2.262 | |||||
Variable Contract Account Values | $ | 57.171 | $ | 50.108 | $ | 57.171 | $ | 50.108 | |||||
Average Daily Variable Annuity Account Values | $ | 45.828 | $ | 38.269 | $ | 42.816 | $ | 36.018 | |||||
Alliance Mutual Funds Contracts | |||||||||||||
Deposits | $ | 0.223 | $ | 0.223 | $ | 1.066 | $ | 0.828 | |||||
Withdrawals | (0.208 | ) | (0.017 | ) | (0.410 | ) | (0.075 | ) | |||||
Net Flows | $ | 0.014 | $ | 0.206 | $ | 0.656 | $ | 0.753 | |||||
Alliance Mutual Funds Contract Account Values* | $ | 3.772 | $ | 2.861 | $ | 3.772 | $ | 2.861 | |||||
Average Daily Alliance Mutual Funds Acct Vals* | $ | 3.728 | $ | 2.620 | $ | 3.401 | $ | 2.304 | |||||
* Alliance program mutual fund account values are not included in the separate accounts reported on our balance sheet | |||||||||||||
Total Annuity Product Spread Information (1) | |||||||||||||
Net investment income (2) (3) | 6.13 | % | 6.23 | % | 6.07 | % | 6.28 | % | |||||
Interest credited to policyholders | 3.79 | % | 3.87 | % | 3.81 | % | 3.92 | % | |||||
Spread (2) (3) | 2.34 | % | 2.36 | % | 2.26 | % | 2.37 | % |
(1) For the annuity products spread, the yield on earning assets is calculated as net investment income on fixed product investment portfolios divided by average earning assets. The average crediting rate is calculated using interest credited on annuity products less bonus credits and excess DCA interest, divided by average fixed account values net of co-insured account values. Fixed account values reinsured under modified co-insurance agreements are included in account values for this calculation since assets (and therefore margin) are retained under these agreements. | |||||||||||||
(2) The net investment income and spread reported above includes earnings from commercial mortgage loan prepayment and bond make-whole premiums. The impact of these premiums on investment income and spread was 11 bps and 17 bps for the 4th quarters of 2005 and 2004, respectively, and 8 bps and 20 bps in for the full year 2005 and 2004, respectively. | |||||||||||||
(3) 2004 includes income from contingent interest received, which contributed $13 million to net investment income or 6 bps to the yield and spread for for the full year. |
12/31/2005 | PAGE 12 | ||||||||||||
Life Insurance Segment | |||||||||||||
Operational Data | |||||||||||||
Unaudited [Millions of Dollars] | |||||||||||||
Fourth Quarter | Full Year | ||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||
First Year Premiums by Product (Millions) | |||||||||||||
Universal Life | |||||||||||||
Excluding MoneyGuard | $ | 144.4 | $ | 114.5 | $ | 438.4 | $ | 401.1 | |||||
MoneyGuard | 62.5 | 66.6 | 226.0 | 244.5 | |||||||||
Total | 206.9 | 181.1 | 664.4 | 645.6 | |||||||||
Variable Universal Life | 33.4 | 27.5 | 106.6 | 84.8 | |||||||||
Whole Life | 14.4 | 13.1 | 40.7 | 41.2 | |||||||||
Term | 8.0 | 9.4 | 33.8 | 41.0 | |||||||||
Total Retail | 262.6 | 231.2 | 845.4 | 812.6 | |||||||||
Corporate Owned Life Insurance (COLI) | 13.1 | 20.4 | 70.5 | 73.7 | |||||||||
Total | $ | 275.8 | $ | 251.5 | $ | 915.9 | $ | 886.2 | |||||
First Year Premiums by Distribution (Millions) | |||||||||||||
Lincoln Financial Advisors | $ | 50.1 | $ | 66.1 | $ | 183.1 | $ | 209.3 | |||||
Lincoln Financial Distributors | 200.0 | 167.4 | 676.2 | 623.7 | |||||||||
Other* | 25.7 | 18.0 | 56.6 | 53.2 | |||||||||
Total by Distribution | $ | 275.8 | $ | 251.5 | $ | 915.9 | $ | 886.2 | |||||
Life Insurance In-Force (Billions) | |||||||||||||
Universal Life & Other | $ | 136.519 | $ | 132.120 | $ | 136.519 | $ | 132.120 | |||||
Term Insurance | 187.850 | 172.459 | 187.850 | 172.459 | |||||||||
Total Life Segment In-Force | $ | 324.369 | $ | 304.579 | $ | 324.369 | $ | 304.579 | |||||
*Other consists of distribution arrangements with third-party intermediaries. |
12/31/2005 | PAGE 13 | |||||||||||||||
Life Insurance Segment | ||||||||||||||||
Life Insurance Account Value Rollforward | ||||||||||||||||
Unaudited [Billions of Dollars] | ||||||||||||||||
Fourth Quarter | Full Year | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Universal Life-Bal Beg-of-Period | $ | 10.053 | $ | 9.444 | $ | 9.648 | $ | 9.030 | ||||||||
Deposits | 0.429 | 0.413 | 1.432 | 1.433 | ||||||||||||
Withdrawals & deaths | (0.105 | ) | (0.117 | ) | (0.422 | ) | (0.474 | ) | ||||||||
Net flows | 0.324 | 0.296 | 1.010 | 0.959 | ||||||||||||
Policyholder assessments | (0.213 | ) | (0.196 | ) | (0.804 | ) | (0.753 | ) | ||||||||
Interest credited | 0.107 | 0.105 | 0.418 | 0.413 | ||||||||||||
Universal Life-Bal End of Period (1) | $ | 10.271 | $ | 9.648 | $ | 10.271 | $ | 9.648 | ||||||||
Variable Universal Life-Bal Beg-of-Period | $ | 2.734 | $ | 2.275 | $ | 2.520 | $ | 2.195 | ||||||||
Deposits | 0.136 | 0.192 | 0.535 | 0.560 | ||||||||||||
Withdrawals & deaths | (0.045 | ) | (0.111 | ) | (0.242 | ) | (0.315 | ) | ||||||||
Net flows | 0.091 | 0.081 | 0.294 | 0.245 | ||||||||||||
Policyholder assessments | (0.054 | ) | (0.050 | ) | (0.202 | ) | (0.194 | ) | ||||||||
Invest inc & chg in mkt value | 0.089 | 0.214 | 0.249 | 0.273 | ||||||||||||
Variable Universal Life -Bal end of Period | $ | 2.861 | $ | 2.520 | $ | 2.861 | $ | 2.520 | ||||||||
Interest Sensitive Whole Life - Bal Beg-of-Period | $ | 2.213 | $ | 2.193 | $ | 2.214 | $ | 2.195 | ||||||||
Deposits | 0.083 | 0.082 | 0.272 | 0.250 | ||||||||||||
Withdrawals & deaths | (0.048 | ) | (0.050 | ) | (0.220 | ) | (0.207 | ) | ||||||||
Net flows | 0.035 | 0.032 | 0.052 | 0.043 | ||||||||||||
Policyholder assessments | (0.045 | ) | (0.041 | ) | (0.176 | ) | (0.149 | ) | ||||||||
Interest credited | 0.034 | 0.030 | 0.146 | 0.126 | ||||||||||||
Int Sensitive Whole Life-Bal End -of -Period | $ | 2.236 | $ | 2.214 | $ | 2.236 | $ | 2.214 | ||||||||
Total Segment- Life Insurance Account Values | ||||||||||||||||
Bal Beg-of-Period | $ | 15.001 | $ | 13.912 | $ | 14.382 | $ | 13.420 | ||||||||
Deposits | 0.648 | 0.686 | 2.240 | 2.243 | ||||||||||||
Withdrawals & deaths | (0.198 | ) | (0.278 | ) | (0.884 | ) | (0.996 | ) | ||||||||
Net flows | 0.450 | 0.408 | 1.356 | 1.247 | ||||||||||||
Policyholder assessments | (0.312 | ) | (0.287 | ) | (1.182 | ) | (1.096 | ) | ||||||||
Invest inc & change in market value | 0.230 | 0.348 | 0.813 | 0.812 | ||||||||||||
Total Segment -Bal end of year | $ | 15.368 | $ | 14.382 | $ | 15.368 | $ | 14.382 | ||||||||
Life Product Spread Information (2) | ||||||||||||||||
Interest Sensitive Products | ||||||||||||||||
Net investment income (3)(4) | 6.26 | % | 6.50 | % | 6.32 | % | 6.67 | % | ||||||||
Interest credited to policyholders | 4.66 | % | 4.80 | % | 4.69 | % | 4.85 | % | ||||||||
Spread (3)(4) | 1.60 | % | 1.69 | % | 1.63 | % | 1.81 | % | ||||||||
Traditional Products | ||||||||||||||||
Net investment income (3)(4) | 6.36 | % | 6.60 | % | 6.43 | % | 6.90 | % | ||||||||
(1) Includes fixed investment option of VUL products. | ||||||||||||||||
(2) Interest Sensitive Products - For the life products spread, the yield on earning assets is calculated as net investment income on fixed product investment portfolios divided by average earning assets. The average crediting rate is calculated using interest credited on life products divided by average fixed account values. Traditional Products - the yield on earning assets is calculated as net investment income on non-par investment portfolios divided by average earning assets. As of year ends 2004 and 2005, interest sensitive products represented 88% and 89%, respectively, of total interest sensitive and traditional non-par earning assets. | ||||||||||||||||
(3) The net investment income and spread reported above includes earnings from commercial mortgage loan prepayment and bond make-whole premiums. The impact of these premiums on investment income and spread for interest sensitive products was 11 bps and 13 bps for the 4th quarter of 2005 and 2004, respectively, and 7 bps and 20 bps for the full year of 2005 and 2004, respectively. The impact for traditional products was 7 bps for the 4th quarter of 2004 and 6 bps and 18 bps for the full year of 2005 and 2004, respectively. There was no impact for the 4th quarter of 2005. | ||||||||||||||||
(4) 2004 includes income from contingent interest received, which contributed $6.5 million to net investment income or 6 bps to the yield and spread on Interest Sensitive Products and $2.4 million to net investment income or 17 bps to the yield and spread on Traditional Products. | ||||||||||||||||
12/31/2005 | PAGE 14 | |||||||||||||||
Investment Management | ||||||||||||||||
Assets Under Management Rollforward | ||||||||||||||||
Unaudited [Billions of Dollars] | ||||||||||||||||
Fourth Quarter | Full Year | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Retail Fixed - Bal Beg-of-Period | $ | 9.061 | $ | 8.060 | $ | 8.257 | $ | 8.186 | ||||||||
Fund Sales | 0.661 | 0.493 | 2.483 | 1.882 | ||||||||||||
Redemptions | (0.432 | ) | (0.299 | ) | (1.476 | ) | (1.520 | ) | ||||||||
Net Money Market | (0.010 | ) | (0.020 | ) | (0.060 | ) | (0.113 | ) | ||||||||
Transfers | (0.102 | ) | (0.040 | ) | (0.082 | ) | (0.212 | ) | ||||||||
Net Flows | 0.117 | 0.134 | 0.865 | 0.037 | ||||||||||||
Market | 0.021 | 0.125 | 0.079 | 0.290 | ||||||||||||
Transfer of Assets Under Administration(1) | - | (0.062 | ) | (0.001 | ) | (0.256 | ) | |||||||||
Balance end of period | $ | 9.199 | $ | 8.257 | $ | 9.199 | $ | 8.257 | ||||||||
Retail Equity - Bal Beg-of-Period | $ | 33.449 | $ | 22.620 | $ | 26.130 | $ | 20.887 | ||||||||
Fund Sales | 2.497 | 2.026 | 11.573 | 7.110 | ||||||||||||
Redemptions | (1.310 | ) | (0.953 | ) | (5.138 | ) | (4.054 | ) | ||||||||
Transfers | 0.042 | (0.037 | ) | (0.203 | ) | 0.042 | ||||||||||
Net Flows | 1.229 | 1.036 | 6.233 | 3.099 | ||||||||||||
Market | 0.796 | 2.685 | 3.114 | 3.256 | ||||||||||||
Sale of subsidiary/Transfer of Assets Under | ||||||||||||||||
Administration (1) (2) | - | (0.211 | ) | (0.003 | ) | (1.112 | ) | |||||||||
Balance at end of period | $ | 35.474 | $ | 26.130 | $ | 35.474 | $ | 26.130 | ||||||||
Total Retail - Bal Beg-of-Period | $ | 42.509 | $ | 30.680 | $ | 34.387 | $ | 29.073 | ||||||||
Retail Sales-Annuities | 0.815 | 0.737 | 2.957 | 2.757 | ||||||||||||
Retail Sales-Mutual Funds | 1.110 | 0.922 | 4.860 | 3.235 | ||||||||||||
Retail Sales-Managed Acct. & Other | 1.232 | 0.860 | 6.239 | 2.999 | ||||||||||||
Total Retail Sales | 3.158 | 2.519 | 14.056 | 8.992 | ||||||||||||
Redemptions | (1.741 | ) | (1.252 | ) | (6.613 | ) | (5.574 | ) | ||||||||
Net Money Market | (0.010 | ) | (0.020 | ) | (0.060 | ) | (0.113 | ) | ||||||||
Transfers | (0.060 | ) | (0.077 | ) | (0.285 | ) | (0.170 | ) | ||||||||
Net Flows | 1.347 | 1.170 | 7.098 | 3.136 | ||||||||||||
Market | 0.817 | 2.810 | 3.193 | 3.546 | ||||||||||||
Sale of subsidiary/Transfer of Assets Under | ||||||||||||||||
Administration (1) (2) | - | (0.273 | ) | (0.004 | ) | (1.368 | ) | |||||||||
Balance at end of period(1) (2) | $ | 44.673 | $ | 34.387 | $ | 44.673 | $ | 34.387 | ||||||||
Institutional Fixed - Bal Beg-of-Period | $ | 12.219 | $ | 7.906 | $ | 9.960 | $ | 8.399 | ||||||||
Inflows | 0.937 | 2.100 | 4.277 | 5.134 | ||||||||||||
Withdrawals/Terminations | (0.132 | ) | (0.077 | ) | (1.300 | ) | (0.593 | ) | ||||||||
Transfers | (0.001 | ) | 0.001 | 0.000 | 0.009 | |||||||||||
Net Flows (2) | 0.803 | 2.024 | 2.977 | 4.549 | ||||||||||||
Market | 0.019 | 0.031 | 0.104 | 0.135 | ||||||||||||
Sale of Subsidiary (2) | - | - | - | (3.124 | ) | |||||||||||
Balance at end of period (2) | $ | 13.042 | $ | 9.960 | $ | 13.042 | $ | 9.960 | ||||||||
Institutional Equity - Bal Beg-of-Period | $ | 17.760 | $ | 10.490 | $ | 11.682 | $ | 25.322 | ||||||||
Inflows | 3.280 | 0.650 | 10.356 | 6.155 | ||||||||||||
Withdrawals/Terminations | (2.160 | ) | (0.607 | ) | (4.520 | ) | (3.583 | ) | ||||||||
Transfers | 0.006 | 0.029 | 0.048 | 0.057 | ||||||||||||
Net Flows | 1.127 | 0.072 | 5.884 | 2.629 | ||||||||||||
Market | 0.492 | 1.120 | 1.813 | 2.394 | ||||||||||||
Sale of Subsidiary (2) | - | - | - | (18.664 | ) | |||||||||||
Balance at end of period | $ | 19.379 | $ | 11.682 | $ | 19.379 | $ | 11.682 | ||||||||
Total Institutional - Bal Beg-of-Period | $ | 29.979 | $ | 18.396 | $ | 21.643 | $ | 33.722 | ||||||||
Inflows | 4.217 | 2.750 | 14.633 | 11.289 | ||||||||||||
Withdrawals/Terminations | (2.292 | ) | (0.684 | ) | (5.820 | ) | (4.176 | ) | ||||||||
Transfers | 0.005 | 0.030 | 0.048 | 0.066 | ||||||||||||
Net Flows | 1.930 | 2.095 | 8.861 | 7.178 | ||||||||||||
Market | 0.511 | 1.151 | 1.917 | 2.530 | ||||||||||||
Sale of Subsidiary (2) | - | - | - | (21.787 | ) | |||||||||||
Balance at end of period | $ | 32.420 | $ | 21.643 | $ | 32.420 | $ | 21.643 | ||||||||
Total Retail/Institutional - At end of period | $ | 77.093 | $ | 56.029 | $ | 77.093 | $ | 56.029 | ||||||||
Insurance-related Assets - At end of period | $ | 44.483 | $ | 43.980 | $ | 44.483 | $ | 43.980 | ||||||||
Total Retail/Inst - Net Flows | $ | 3.277 | $ | 3.265 | $ | 15.959 | $ | 10.314 | ||||||||
Total Assets Under Management | ||||||||||||||||
At end of period | $ | 121.576 | $ | 100.009 | $ | 121.576 | $ | 100.009 | ||||||||
Subadvised Assets, included in Assets Under Management above | ||||||||||||||||
Retail | $ | 17.162 | $ | 10.740 | $ | 17.162 | $ | 10.740 | ||||||||
Institutional | 4.782 | 3.740 | 4.782 | 3.740 | ||||||||||||
Total Subadvised Assets | $ | 21.945 | $ | 14.480 | $ | 21.945 | $ | 14.480 | ||||||||
(1) Retail assets under management include assets under administration related to the mutual fund-based 401(k) business. In the third quarter of 2004, this business was outsourced to Bisys. As a result, the third and fourth quarter of 2004 had net outflows of assets under administration of approximately $0.776 billion and $0.273 billion, respectively. | ||||||||||||||||
(2) In the third quarter of 2004, the Investment Management segment sold its London-based international investment unit. Assets under management transferred as a result of the sale were $22.1 billion. See page 16A for assets under management without the London-based international investment unit. In addition, the London-based international investment unit began subadvising certain retail and institutional assets in the third quarter of 2004. |
12/31/2005 | PAGE 14A | ||||||||||||
Investment Management (excluding Assets Managed by | |||||||||||||
Delaware's London-based International Investment Unit) | |||||||||||||
Assets Under Management Rollforward | |||||||||||||
Unaudited [Billions of Dollars] | |||||||||||||
Full Year | |||||||||||||
2005 | 2004 | ||||||||||||
Retail Fixed - Bal Beg-of-Period | $ | 8.257 | $ | 8.186 | |||||||||
Fund Sales | 2.483 | 1.882 | |||||||||||
Redemptions | (1.476 | ) | (1.520 | ) | |||||||||
Net Money Market | (0.060 | ) | (0.113 | ) | |||||||||
Transfers | (0.082 | ) | (0.212 | ) | |||||||||
Net Flows | 0.865 | 0.037 | |||||||||||
Market | 0.079 | 0.290 | |||||||||||
Transfer of Assets Under Administration (1) | (0.001 | ) | (0.256 | ) | |||||||||
Balance end of period | $ | 9.199 | $ | 8.257 | |||||||||
Retail Equity - Bal Beg-of-Period | $ | 26.130 | $ | 20.564 | |||||||||
Fund Sales | 11.573 | 7.105 | |||||||||||
Redemptions | (5.138 | ) | (4.024 | ) | |||||||||
Transfers | (0.203 | ) | 0.042 | ||||||||||
Net Flows | 6.233 | 3.123 | |||||||||||
Market | 3.114 | 3.236 | |||||||||||
Transfer of Assets Under Administration (1) | (0.003 | ) | (0.793 | ) | |||||||||
Balance at end of period | $ | 35.474 | $ | 26.130 | |||||||||
Total Retail - Bal Beg-of-Period | $ | 34.387 | $ | 28.750 | |||||||||
Retail Sales-Annuities | 2.957 | 2.752 | |||||||||||
Retail Sales-Mutual Funds | 4.860 | 3.235 | |||||||||||
Retail Sales-Managed Acct. & Other | 6.239 | 2.999 | |||||||||||
Total Retail Sales | 14.056 | 8.987 | |||||||||||
Redemptions | (6.613 | ) | (5.544 | ) | |||||||||
Net Money Market | (0.060 | ) | (0.113 | ) | |||||||||
Transfers | (0.285 | ) | (0.170 | ) | |||||||||
Net Flows | 7.098 | 3.160 | |||||||||||
Market | 3.193 | 3.526 | |||||||||||
Transfer of Assets Under Administration (1) | (0.004 | ) | (1.049 | ) | |||||||||
Balance at end of period | $ | 44.673 | $ | 34.387 | |||||||||
Institutional Fixed - Bal Beg-of-Period | $ | 9.960 | $ | 5.981 | |||||||||
Inflows | 4.277 | 4.356 | |||||||||||
Withdrawals/Terminations | (1.300 | ) | (0.452 | ) | |||||||||
Transfers | 0.000 | 0.009 | |||||||||||
Net Flows | 2.977 | 3.913 | |||||||||||
Market | 0.104 | 0.067 | |||||||||||
Balance at end of period | $ | 13.042 | $ | 9.960 | |||||||||
Institutional Equity - Bal Beg-of-Period | $ | 11.682 | $ | 10.318 | |||||||||
Inflows | 10.356 | 2.281 | |||||||||||
Withdrawals/Terminations | (4.520 | ) | (2.428 | ) | |||||||||
Transfers | 0.048 | 0.118 | |||||||||||
Net Flows | 5.884 | (0.029 | ) | ||||||||||
Market | 1.813 | 1.393 | |||||||||||
Balance at end of period | $ | 19.379 | $ | 11.682 | |||||||||
Total Institutional - Bal Beg-of-Period | $ | 21.643 | $ | 16.299 | |||||||||
Inflows | 14.633 | 6.637 | |||||||||||
Withdrawals/Terminations | (5.820 | ) | (2.880 | ) | |||||||||
Transfers | 0.048 | 0.127 | |||||||||||
Net Flows | 8.861 | 3.884 | |||||||||||
Market | 1.917 | 1.459 | |||||||||||
Balance at end of period | $ | 32.420 | $ | 21.643 | |||||||||
Total Retail/Institutional - At end of period | $ | 77.093 | $ | 56.029 | |||||||||
Insurance-related Assets - At end of period | $ | 44.483 | $ | 43.980 | |||||||||
Total Retail/Inst - Net Flows | $ | 15.959 | $ | 7.045 | |||||||||
Total Assets Under Management | |||||||||||||
At end of period | $ | 121.576 | $ | 100.009 | |||||||||
Subadvised Assets, included in Assets Under Management above | |||||||||||||
Retail | $ | 17.162 | $ | 10.740 | |||||||||
Institutional | 4.782 | 3.740 | |||||||||||
Total Subadvised Assets | $ | 21.945 | $ | 14.480 | |||||||||
(1) Retail assets under management include assets under administration related to the mutual fund-based 401(k) business. In the third quarter of 2004, this business was outsourced to Bisys. As a result, the third and fourth quarter of 2004 had net outflows of assets under administration of approximately $0.776 billion and $0.273 billion, respectively. | |||||||||||||
(2) This page presents the assets under management roll-forward without the Investment Management segment's London-based international investment unit, which was sold in the third quarter of 2004 and resulted in the transfer of assets under management of $22.1 billion. |
12/31/2005 | PAGE 15 | ||||||||||||
Lincoln UK | |||||||||||||
Operational Data | |||||||||||||
Unaudited [Billions of Dollars] | |||||||||||||
Fourth Quarter | Full Year | ||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||
Unit Linked Assets - Beg-of-Period | $ | 7.180 | $ | 6.468 | $ | 7.186 | $ | 6.390 | |||||
Deposits | 0.156 | 0.108 | 0.389 | 0.378 | |||||||||
Withdrawals (incl. chgs) & Deaths | (0.178 | ) | (0.188 | ) | (0.728 | ) | (0.712 | ) | |||||
Net Flows | (0.023 | ) | (0.080 | ) | (0.339 | ) | (0.335 | ) | |||||
Inv Inc & Chg in Mkt Val | 0.347 | 0.411 | 1.243 | 0.648 | |||||||||
Foreign Currency Adjustment | (0.184 | ) | 0.387 | (0.770 | ) | 0.482 | |||||||
Unit Linked Assets - end of Period | $ | 7.320 | $ | 7.186 | $ | 7.320 | $ | 7.186 | |||||
Individual Life In-force | $ | 17.521 | $ | 20.378 | $ | 17.521 | $ | 20.378 | |||||
Exchange Rate - Dollars to Pounds | |||||||||||||
For-the-Period | 1.747 | 1.875 | 1.821 | 1.834 | |||||||||
End-of-Period | 1.719 | 1.919 | 1.719 | 1.919 | |||||||||
12/31/2005 | PAGE 16 | ||||||||||||
Other Operations | |||||||||||||
Unaudited [Millions of Dollars] | |||||||||||||
Fourth Quarter | Full Year | ||||||||||||
For the Year Ended December 31 | 2005 | 2004 | 2005 | 2004 | |||||||||
Operating Revenue by Source: | |||||||||||||
Lincoln Financial Advisors | $ | 136.2 | $ | 103.9 | $ | 514.0 | $ | 383.6 | |||||
Lincoln Financial Distributors | 85.1 | 69.4 | 290.7 | 245.2 | |||||||||
Total Distribution | 221.3 | 173.2 | 804.7 | 628.8 | |||||||||
Amortization of deferred gain on indemnity reinsurance* | 18.9 | 19.1 | 75.7 | 87.0 | |||||||||
Other [Including | |||||||||||||
Consolidating Adjustments] | (151.0 | ) | (111.3 | ) | (528.3 | ) | (380.7 | ) | |||||
Total Operating Revenue | $ | 89.2 | $ | 81.1 | $ | 352.1 | $ | 335.1 | |||||
Income (Loss) from Operations by Source: | |||||||||||||
Lincoln Financial Advisors | $ | 3.2 | $ | (0.3 | ) | $ | (13.2 | ) | $ | (17.8 | ) | ||
Lincoln Financial Distributors | (3.5 | ) | (6.3 | ) | (22.8 | ) | (23.7 | ) | |||||
Total Distribution | (0.3 | ) | (6.6 | ) | (36.1 | ) | (41.5 | ) | |||||
Amortization of deferred gain on indemnity reinsurance* | 12.3 | 12.4 | 49.2 | 56.5 | |||||||||
LNC Financing | (14.4 | ) | (14.6 | ) | (57.6 | ) | (61.0 | ) | |||||
Other Corporate (1) | 9.1 | 2.5 | 46.3 | (11.3 | ) | ||||||||
Income (Loss) from Operations | $ | 6.7 | $ | (6.3 | ) | $ | 1.8 | $ | (57.2 | ) | |||
* Represents the amortization of deferred gain recognized on the business sold through indemnity reinsurance to Swiss Re. | |||||||||
(1) Includes a reduction of the valuation allowance on the deferred tax asset of our foreign life reinsurance subsidiary of $4.3 million and $46.8 million in fourth quarter and full year 2005, respectively and $4.4 million in the fourth quarter of 2004. | |||||||||
12/31/2005 | PAGE 17 | ||||||||||||
Consolidated Investment Data | |||||||||||||
Unaudited [Millions of Dollars] | |||||||||||||
Fourth Quarter | Full Year | ||||||||||||
For the Year Ended December 31 | 2005 | 2004 | 2005 | 2004 | |||||||||
Net Investment Income | |||||||||||||
Fixed maturity AFS securities | $ | 509.7 | $ | 514.8 | $ | 2,030.5 | $ | 2,005.7 | |||||
Equity AFS securities | 3.3 | 4.4 | 9.6 | 10.9 | |||||||||
Trading securities | 48.7 | 49.7 | 193.7 | 193.5 | |||||||||
Mortgage loans on real estate | 75.1 | 73.8 | 287.6 | 350.1 | |||||||||
Real estate | 5.6 | 5.4 | 50.1 | 26.9 | |||||||||
Policy loans | 29.2 | 31.3 | 118.4 | 119.8 | |||||||||
Invested cash | 19.2 | 17.9 | 63.0 | 32.2 | |||||||||
Other investments | 7.0 | 2.4 | 61.1 | 55.3 | |||||||||
Investment revenue | 697.9 | 699.8 | 2,813.9 | 2,794.4 | |||||||||
Investment expense | (29.8 | ) | (25.7 | ) | (111.6 | ) | (90.3 | ) | |||||
Net Investment Income | 668.1 | 674.1 | 2,702.3 | 2,704.1 | |||||||||
Gross-up of Tax Exempt Income | 2.1 | 2.6 | 7.1 | 7.7 | |||||||||
Adjusted Net Investment Income | $ | 670.2 | $ | 676.6 | $ | 2,709.4 | $ | 2,711.8 | |||||
Mean Invested Assets (Amortized Cost) | $ | 44,035.2 | $ | 43,763.4 | $ | 43,933.3 | $ | 43,216.4 | |||||
Ratio of Adjusted Net Invest Income | |||||||||||||
Over Mean Invested Assets | 6.09 | % | 6.18 | % | 6.17 | % | 6.27 | % | |||||
Investment Gains (Losses) | |||||||||||||
Realized Gains (Losses) on Investments | $ | (6.2 | ) | $ | 3.9 | $ | (14.5 | ) | $ | (30.0 | ) | ||
Gains(Losses) on Derivatives | 0.1 | 0.3 | (0.0 | ) | (7.4 | ) | |||||||
Incr (Decr) in Unreal Gains on Sec | |||||||||||||
Avail-for-Sale (after DAC/Tax) | (72.4 | ) | 42.8 | (326.3 | ) | 29.8 | |||||||
Incr (Decr) on Derivatives | (1.5 | ) | (5.8 | ) | (6.7 | ) | (8.1 | ) | |||||
Securities Available-for-Sale | |||||||||||||
[Billions of Dollars] | |||||||||||||
Fixed Maturity Sec (Fair Value) | 36.687 | 37.936 | 36.687 | 37.936 | |||||||||
Fixed Maturity Sec (Amortized Cost) | 35.348 | 35.692 | 35.348 | 35.692 | |||||||||
Equity Securities (Fair Value) | 0.147 | 0.163 | 0.147 | 0.163 | |||||||||
Equity Securities (Amortized Cost) | 0.139 | 0.148 | 0.139 | 0.148 | |||||||||
% of Fixed Maturity Securities (Based on Fair Value) | |||||||||||||
Treasuries and AAA | 23.4 | % | 23.5 | % | 23.4 | % | 23.5 | % | |||||
AA or better | 30.9 | % | 29.9 | % | 30.9 | % | 29.9 | % | |||||
BB or less | 7.4 | % | 7.0 | % | 7.4 | % | 7.0 | % | |||||