This document is dated May 2, 2006. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.
Lincoln Financial Group | |
Statistical Report | |
First Quarter | |
2006 | |
Table of Contents | |
Notes | |
Financial Highlights | 1 - 6 |
Ten-Year Summary | 7 |
Quarterly Summary | 8 |
Consolidated Statements of Income | 9 - 10 |
Consolidating Statements of Income from Operations | 11 - 12 |
Five-Year Comparative Balance Sheet | 13 |
Quarterly Balance Sheet | 14 |
Consolidating Balance Sheets | 15 - 16 |
Lincoln Retirement | |
Income Statement & Operational Data | 17 - 18 |
Account Value Roll Forward | 19 - 20 |
Annuity Account Values | 21 - 22 |
Life Insurance | |
Income Statements | 23 - 24 |
Operational Data | 25 |
Account Value Roll Forward | 26 - 27 |
Investment Management | |
Income Statements | 28 - 29 |
Assets Under Management Roll Forward | 30 - 31 |
Lincoln UK | |
Income Statements | 32 - 33 |
Operational Data | 34 |
Other Operations | 35 |
Restructuring Charges | 36 |
Consolidated | |
Domestic Retail Deposits / Account Balances | 37 |
Total Domestic Net Flows | 37 |
Assets Managed | 38 |
Investment Data | 39 |
Common Stock / Debt Information | 40 |
Jefferson-Pilot Data | |
Financial Highlights | 41 |
Performance Measures | 42 |
Consolidated Condensed Statements of Income | 43 |
Quarterly Consolidated Statements of Income | 44 |
Consolidated Balance Sheets | 45 |
Quarterly Consolidated Balance Sheets | 46 |
3/31/2006 | 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, 30A, 31A, 37A, 38A) have been presented excluding the investment assets managed by the London-based international investment unit to provide more consistent comparisons between periods. | ||
* | Value of business acquired on the balance sheet was referred to as present value of in-force in our previous statistical supplements. | ||
* | Certain reclassifications have been made to the prior periods presented to conform to the December 31, 2005 presentation. | ||
Subsequent Events | |||
On April 3, 2006, we completed our merger with Jefferson-Pilot Corporation (“Jefferson-Pilot”). Jefferson-Pilot’s results of operations will be included in our results of operations beginning with the second quarter of 2006. As a result of the merger, we offer fixed and variable universal life, fixed and equity indexed annuities, variable annuities, 401(k) and 403(b) offerings, and group life, disability and dental insurance products. We also operate television and radio stations. | |||
We paid $1.8 billion in cash and issued approximately 112 million shares of our common stock to the former holders of Jefferson-Pilot common stock in connection with the merger. The purchase price is estimated to be $7.5 billion, and the estimated fair value of Jefferson-Pilot’s net assets is assumed to be $4.3 billion. | |||
We financed the cash portion of the merger consideration by borrowing $1.8 billion under the credit agreement that we entered into with a group of banks in December 2005 (the “Bridge Facility”). In April 2006, we issued $500 million of Floating Rate Senior Notes due April 2009, $500 million of 6.15% Senior Notes due April 2036 and $275 million of our 6.75% junior subordinated debentures due 2066. We used the net proceeds of approximately $1.3 billion to repay a portion of the borrowings under the Bridge Facility. | |||
On April 3, 2006, we entered into an agreement to purchase a variable number of shares of our common stock from a third party broker-dealer, using an accelerated stock buyback program for an aggregate purchase price of $500 million. The number of shares to be repurchased under this arrangement will be between approximately 8 million but not more than approximately 9 million shares, based on the volume weighted average share price of our common stock over the program’s duration. | |||
Certain financial information of Jefferson-Pilot for the three month periods ended March 31, 2006 and 2005 has been included on pages 41 through 46 of this statistical supplement. |
3/31/2006 | PAGE 1 | ||||||||||||
Financial Highlights | |||||||||||||
Unaudited [Millions of Dollars, except Common Share Data] | |||||||||||||
For the Quarter Ended March 31 | |||||||||||||
2006 | 2005 | ||||||||||||
Amount | Amount | Change | % Change | ||||||||||
Income from Operations - By Segment | |||||||||||||
Lincoln Retirement | $ | 123.1 | $ | 98.6 | $ | 24.5 | 24.8 | % | |||||
Life Insurance | 82.2 | 67.7 | 14.5 | 21.4 | % | ||||||||
Investment Management | 20.3 | 7.4 | 12.9 | 174.9 | % | ||||||||
Lincoln UK | 10.7 | 10.0 | 0.7 | 7.0 | % | ||||||||
Corporate & Other | (14.6 | ) | (11.3 | ) | (3.3 | ) | -29.2 | % | |||||
Total Income from Operations | 221.8 | 172.5 | 49.3 | 28.6 | % | ||||||||
Realized losses on investments and derivatives | (4.4 | ) | (4.6 | ) | 0.2 | 4.2 | % | ||||||
Net gain on reinsurance | |||||||||||||
derivative/trading account securities | 3.8 | 2.8 | 1.0 | 33.4 | % | ||||||||
Gain on sale of subsidiaries/ businesses | - | 9.3 | (9.3 | ) | -100.0 | % | |||||||
Reserve development/ amortization of related deferred gain | 0.2 | 0.2 | - | - | |||||||||
Restructuring charges | (0.2 | ) | (1.3 | ) | 1.1 | 83.7 | % | ||||||
Net Income | $ | 221.2 | $ | 178.9 | $ | 42.3 | 23.6 | % | |||||
Earnings per share (diluted) | |||||||||||||
Income from Operations | $ | 1.25 | $ | 0.98 | $ | 0.27 | 27.7 | % | |||||
Realized losses on investments and derivatives | (0.03 | ) | (0.03 | ) | - | ||||||||
Net gain on reinsurance | |||||||||||||
derivative/trading account securities | 0.02 | 0.02 | - | ||||||||||
Gain on sale of subsidiaries/ businesses | - | 0.05 | (0.05 | ) | -100.0 | % | |||||||
Restructuring charges | - | (0.01 | ) | 0.01 | 100.0 | % | |||||||
Net Income | $ | 1.24 | $ | 1.01 | $ | 0.23 | 22.8 | % | |||||
Operating Revenue- By Segment | |||||||||||||
Lincoln Retirement | $ | 586.7 | $ | 538.5 | $ | 48.1 | 8.9 | % | |||||
Life Insurance | 515.0 | 484.2 | 30.9 | 6.4 | % | ||||||||
Investment Management | 162.6 | 130.4 | 32.3 | 24.8 | % | ||||||||
Lincoln UK | 69.5 | 74.6 | (5.2 | ) | -6.9 | % | |||||||
Corporate & Other | 83.9 | 73.8 | 10.1 | 13.7 | % | ||||||||
Total Operating Revenue | 1,417.8 | 1,301.5 | 116.2 | 8.9 | % | ||||||||
Realized losses on investments | (10.5 | ) | (8.7 | ) | (1.8 | ) | -20.1 | % | |||||
Gains on derivatives | 3.5 | 1.5 | 2.1 | 138.2 | % | ||||||||
Gain on reinsurance derivative/trading | |||||||||||||
account securities | 5.9 | 4.4 | 1.5 | 33.9 | % | ||||||||
Gain on sale of subsidiaries/ businesses | - | 14.2 | (14.2 | ) | -100.0 | % | |||||||
Amortization of deferred gain-reserve development | 0.3 | 0.3 | - | - | |||||||||
Total Revenue | $ | 1,417.0 | $ | 1,313.2 | $ | 103.8 | 7.9 | % |
3/31/2006 | PAGE 2 | ||||||||||||
Financial Highlights | |||||||||||||
Unaudited [Billions of Dollars] | |||||||||||||
Operational Data by Segment | For the Quarter Ended March 31 | ||||||||||||
2006 | 2005 | ||||||||||||
Amount | Amount | Change | % Change | ||||||||||
Lincoln Retirement | |||||||||||||
Gross Deposits | $ | 2.888 | $ | 2.639 | $ | 0.249 | 9.4 | % | |||||
Net Flows | 0.858 | 0.776 | 0.082 | 10.6 | % | ||||||||
Account Values (Gross) | 75.902 | 65.048 | 10.854 | 16.7 | % | ||||||||
Account Values (Net of Reinsurance) | 73.700 | 62.757 | 10.943 | 17.4 | % | ||||||||
Life Insurance Segment | |||||||||||||
First Year Premium- Retail (in millions) | $ | 203.711 | $ | 179.344 | $ | 24.366 | 13.6 | % | |||||
First Year Premium- COLI (in millions) | 19.649 | 24.804 | (5.155 | ) | -20.8 | % | |||||||
First Year Premium- Total (in millions) | 223.360 | 204.148 | 19.211 | 9.4 | % | ||||||||
In-force | 329.388 | 308.976 | 20.411 | 6.6 | % | ||||||||
Account Values | 15.655 | 14.466 | 1.189 | 8.2 | % | ||||||||
Investment Management Segment | |||||||||||||
Retail Deposits | $ | 3.781 | $ | 3.381 | $ | 0.400 | 11.8 | % | |||||
Retail Net Flows | 1.452 | 1.579 | (0.126 | ) | -8.0 | % | |||||||
Institutional In-flows | 4.783 | 1.787 | 2.996 | 167.7 | % | ||||||||
Institutional Net Flows | 3.551 | 1.217 | 2.334 | 191.8 | % | ||||||||
Total Deposits and In-flows | 8.564 | 5.168 | 3.396 | 65.7 | % | ||||||||
Total Net Flows | 5.004 | 2.796 | 2.208 | 79.0 | % | ||||||||
Assets Under Management- Retail and Inst'l | 86.021 | 58.022 | 28.000 | 48.3 | % | ||||||||
Assets Under Management - Insurance-related Assets | 43.430 | 44.210 | (0.779 | ) | -1.8 | % | |||||||
Assets Under Management - Total Segment | 129.452 | 102.231 | 27.220 | 26.6 | % | ||||||||
Consolidated | |||||||||||||
Domestic Retail Deposits | $ | 6.990 | $ | 6.249 | $ | 0.740 | 11.8 | % | |||||
Domestic Retail Account Balances | 129.328 | 104.936 | 24.392 | 23.2 | % | ||||||||
Domestic Retail Net Flows | 2.664 | 2.593 | 0.071 | 2.7 | % | ||||||||
Domestic Deposits | 11.740 | 8.021 | 3.719 | 46.4 | % | ||||||||
Domestic Net Flows | 6.241 | 3.851 | 2.390 | 62.1 | % | ||||||||
Assets Under Management | 182.959 | 145.487 | 37.472 | 25.8 | % |
3/31/2006 | PAGE 3 | ||||||||||||
Financial Highlights | |||||||||||||
Unaudited [Millions of Dollars, except Common Share Data] | |||||||||||||
For the Quarter Ended March 31 | |||||||||||||
2006 | 2005 | ||||||||||||
Amount | Amount | Change | % Change | ||||||||||
Balance Sheet Assets - End of Period | $ | 128,393.9 | $ | 116,352.2 | $ | 12,041.7 | 10.3 | % | |||||
Shareholders' Equity | |||||||||||||
Beg of Period (including AOCI) | $ | 6,384.4 | $ | 6,175.6 | $ | 208.8 | |||||||
End of Period (including AOCI) | 6,338.2 | 6,042.9 | 295.2 | ||||||||||
End of Period (excluding AOCI) | 6,053.2 | 5,365.8 | 687.4 | ||||||||||
Average Equity (excluding AOCI) | 5,954.9 | 5,338.8 | 616.1 | ||||||||||
Return on Equity | |||||||||||||
Net Income/Average Equity (excluding AOCI) | 14.9 | % | 13.4 | % | 1.5 | % | |||||||
Inc from Operations/Average Equity (excluding AOCI) | 14.9 | % | 12.9 | % | 2.0 | % | |||||||
Return on Capital | |||||||||||||
Inc from Operations/Average Capital | 12.9 | % | 10.8 | % | 2.1 | % | |||||||
Common Stock Outstanding | |||||||||||||
Average for the Period - Diluted | 177.9 | 176.6 | 1.3 | 0.7 | % | ||||||||
End of Period - Assuming Conv of Pref. | 176.1 | 173.9 | 2.2 | 1.3 | % | ||||||||
End of Period - Diluted | 178.5 | 176.5 | 1.9 | 1.1 | % | ||||||||
Book Value (including AOCI) | $ | 35.99 | $ | 34.74 | $ | 1.25 | 3.6 | % | |||||
Book Value (excluding AOCI) | $ | 34.37 | $ | 30.85 | $ | 3.52 | 11.4 | % | |||||
Cash Returned to Shareholders | |||||||||||||
Share Repurchase - dollar amount | $ | - | 34.6 | (34.6 | ) | ||||||||
Dividends Declared to Shareholders | 67.5 | 63.7 | 3.7 | ||||||||||
Total Cash Returned to Shareholders | $ | 67.5 | $ | 98.4 | $ | (30.9 | ) | ||||||
Share Repurchase - number of shares | - | 0.755 | (0.755 | ) | |||||||||
Dividend Declared on Common Stock - per share | $ | 0.380 | $ | 0.365 | $ | 0.015 | 4.1 | % | |||||
For the Quarter Ended March 31 | |||||||||||||
2006 | 2005 | ||||||||||||
Amount | Amount | ||||||||||||
Comprehensive Income (Loss) | |||||||||||||
Net Income | $ | 221.2 | $ | 178.9 | |||||||||
Foreign Currency Translation | 6.3 | (7.8 | ) | ||||||||||
Net Unrealized Losses on Securities | (276.4 | ) | (240.0 | ) | |||||||||
Gains (Losses) on Derivatives | 27.8 | (6.3 | ) | ||||||||||
Minimum Pension Liability Adjustment | (0.6 | ) | 0.6 | ||||||||||
Comprehensive Loss | $ | (21.6 | ) | $ | (74.6 | ) |
3/31/2006 | PAGE 4 | ||||||||||||
Financial Highlights | |||||||||||||
Unaudited [Millions of Dollars] | |||||||||||||
For the Quarter Ended March 31 | |||||||||||||
2006 | 2005 | ||||||||||||
Amount | Amount | Change | % Change | ||||||||||
Condensed Consolidated Statements of Income | |||||||||||||
Revenue: | |||||||||||||
Insurance Premiums and Fees | $ | 554.1 | $ | 489.4 | $ | 64.7 | 13.2 | % | |||||
Investment Advisory Fees | 84.9 | 59.4 | 25.5 | 43.0 | % | ||||||||
Net Investment Income | 678.3 | 659.8 | 18.5 | 2.8 | % | ||||||||
Realized Losses on Investments | (10.5 | ) | (8.7 | ) | (1.8 | ) | -20.1 | % | |||||
Gains on Derivatives | 3.5 | 1.5 | 2.1 | 138.2 | % | ||||||||
Gain on Reinsurance Derivative/Trading | |||||||||||||
Account Securities | 5.9 | 4.4 | 1.5 | 34.7 | % | ||||||||
Gain on Sale of Subsidiaries/ Businesses | - | 14.2 | (14.2 | ) | -100.0 | % | |||||||
Amortization of Deferred Gain on | |||||||||||||
Indemnity Reinsurance | 19.1 | 19.3 | (0.2 | ) | -0.9 | % | |||||||
Other Revenue | 81.6 | 74.0 | 7.6 | 10.2 | % | ||||||||
Total Revenue | 1,417.0 | 1,313.2 | 103.8 | 7.9 | % | ||||||||
Benefits and Expenses: | |||||||||||||
Benefits | 584.4 | 572.6 | 11.7 | 2.0 | % | ||||||||
Underwriting, Acquisition, | |||||||||||||
Insurance and Other Expenses | 517.8 | 502.8 | 15.0 | 3.0 | % | ||||||||
Total Benefits and Expenses | 1,102.1 | 1,075.4 | 26.7 | 2.5 | % | ||||||||
Income before Federal Taxes | 314.9 | 237.8 | 77.1 | 32.4 | % | ||||||||
Federal Income Taxes | 93.6 | 58.9 | 34.8 | 59.1 | % | ||||||||
Net Income | $ | 221.2 | $ | 178.9 | $ | 42.3 | 23.6 | % |
3/31/2006 | PAGE 5 | ||||||||||||
Financial Highlights | |||||||||||||
Unaudited [Millions of Dollars] | |||||||||||||
As of | |||||||||||||
March | December | �� | |||||||||||
2006 | 2005 | ||||||||||||
Amount | Amount | Change | % Change | ||||||||||
Condensed Consolidated Balance Sheets | |||||||||||||
Assets: | |||||||||||||
Investments: | |||||||||||||
Available for Sale Securities: | |||||||||||||
Fixed Maturities | $ | 32,892.8 | $ | 33,443.2 | $ | (550.4 | ) | -1.6 | % | ||||
Equities | 176.0 | 144.7 | 31.3 | 21.6 | % | ||||||||
Trading Securities | 3,190.1 | 3,246.0 | (56.0 | ) | -1.7 | % | |||||||
Mortgage Loans on Real Estate | 3,586.2 | 3,662.6 | (76.5 | ) | -2.1 | % | |||||||
Real Estate | 180.4 | 182.7 | (2.3 | ) | -1.3 | % | |||||||
Policy Loans | 1,860.4 | 1,862.2 | (1.9 | ) | -0.1 | % | |||||||
Other Long-Term Investments | 687.5 | 626.9 | 60.6 | 9.7 | % | ||||||||
Total Investments | 42,573.2 | 43,168.4 | (595.2 | ) | -1.4 | % | |||||||
Deferred Acquisition Costs | 4,371.2 | 4,092.2 | 279.0 | 6.8 | % | ||||||||
Value of Business Acquired | 984.4 | 998.9 | (14.5 | ) | -1.5 | % | |||||||
Goodwill | 1,194.4 | 1,194.2 | 0.1 | 0.0 | % | ||||||||
Other Assets | 11,286.5 | 11,586.9 | (300.4 | ) | -2.6 | % | |||||||
Assets Held in Separate Accounts | 67,984.2 | 63,746.8 | 4,237.4 | 6.6 | % | ||||||||
Total Assets | $ | 128,393.9 | $ | 124,787.6 | $ | 3,606.3 | 2.9 | % | |||||
Liabilities and Shareholders' Equity | |||||||||||||
Liabilities: | |||||||||||||
Insurance and Investment Contract Liabilities | $ | 47,000.5 | $ | 47,222.8 | $ | (222.3 | ) | -0.5 | % | ||||
Other Liabilities | 7,071.0 | 7,433.6 | (362.6 | ) | -4.9 | % | |||||||
Liabilities Related to Separate Accounts | 67,984.2 | 63,746.8 | 4,237.4 | 6.6 | % | ||||||||
Total Liabilities | 122,055.7 | 118,403.2 | 3,652.5 | 3.1 | % | ||||||||
Shareholders' Equity: | |||||||||||||
Net Unrealized Gains on Securities | |||||||||||||
and Derivatives | 255.4 | 503.9 | (248.5 | ) | -49.3 | % | |||||||
Minimum Pension Liability Adjustment | (60.1 | ) | (59.5 | ) | (0.6 | ) | -0.9 | % | |||||
Foreign Currency Translation Adjustment | 89.7 | 83.4 | 6.3 | 7.5 | % | ||||||||
Other Shareholders' Equity | 6,053.2 | 5,856.6 | 196.6 | 3.4 | % | ||||||||
Total Shareholders' Equity | 6,338.2 | 6,384.4 | (46.2 | ) | -0.7 | % | |||||||
Total Liabilities and Shareholders' Equity | $ | 128,393.9 | $ | 124,787.6 | $ | 3,606.3 | 2.9 | % |
3/31/2006 | PAGE 6 | ||||||||||||
Financial Highlights | |||||||||||||
Unaudited [Millions of Dollars] | |||||||||||||
For the Three Months Ended March 31 | |||||||||||||
2006 | 2005 | ||||||||||||
Amount | Amount | Change | % Change | ||||||||||
Roll Forward of Deferred Acquisition Costs | |||||||||||||
Balance at beginning of period | $ | 4,092.2 | $ | 3,445.0 | $ | 647.3 | 18.8 | % | |||||
Deferral | 235.1 | 203.5 | 31.6 | 15.5 | % | ||||||||
Amortization | (144.5 | ) | (132.8 | ) | (11.7 | ) | 8.8 | % | |||||
Included in Total Benefits and Expenses | 90.6 | 70.7 | 20.0 | 28.2 | % | ||||||||
Adjustment related to realized (gains) losses | |||||||||||||
on available-for-sale securities | (10.9 | ) | (11.7 | ) | 0.8 | 6.9 | % | ||||||
Adjustment related to unrealized (gains) losses | |||||||||||||
on available-for-sale securities | 194.2 | 215.7 | (21.5 | ) | -10.0 | % | |||||||
Foreign currency translation adjustment | 5.1 | (7.0 | ) | 12.0 | NM | ||||||||
Balance at end of period | $ | 4,371.2 | $ | 3,712.7 | $ | 658.5 | 17.7 | % | |||||
Roll Forward of Value of Business Acquired | |||||||||||||
Balance at beginning of period | $ | 998.9 | $ | 1,095.2 | $ | (96.3 | ) | -8.8 | % | ||||
Amortization | (17.2 | ) | (18.9 | ) | 1.7 | -9.2 | % | ||||||
Foreign currency translation adjustment | 2.7 | (3.3 | ) | 5.9 | NM | ||||||||
Balance at end of period | $ | 984.4 | $ | 1,073.1 | $ | (88.6 | ) | -8.3 | % | ||||
Roll Forward of Deferred Front-End Load* | |||||||||||||
Balance at beginning of period | $ | 723.6 | $ | 764.1 | $ | (40.5 | ) | -5.3 | % | ||||
Deferral | 21.7 | 22.6 | (0.8 | ) | -3.7 | % | |||||||
Amortization | (21.4 | ) | (25.2 | ) | 3.8 | -15.1 | % | ||||||
Included in Income from Operations | 0.3 | (2.7 | ) | 3.0 | 110.9 | % | |||||||
Foreign currency translation adjustment | 3.8 | (5.2 | ) | 8.9 | NM | ||||||||
Balance at end of period | $ | 727.7 | $ | 756.2 | $ | (28.6 | ) | -3.8 | % | ||||
* Included in Insurance and Investment Contract Liabilities on the Balance Sheet |
3/31/2006 | PAGE 7 | ||||||||||||||||||||||||||||||
Ten-Year Summary | |||||||||||||||||||||||||||||||
Unaudited [Millions of Dollars, except Common Share Data] | |||||||||||||||||||||||||||||||
For the Year Ended December 31 | 2005 | 2004 | 2003 | 2002 | 2001 | 2000 | 1999 | 1998 | 1997 | 1996 | |||||||||||||||||||||
Operating Revenue | |||||||||||||||||||||||||||||||
Lincoln Retirement | $ | 2,258.0 | $ | 2,128.0 | $ | 1,985.1 | $ | 1,985.5 | $ | 2,033.1 | $ | 2,138.9 | $ | 2,128.0 | $ | 2,050.6 | $ | 1,959.5 | $ | 1,759.5 | |||||||||||
Life Insurance | 1,993.5 | 1,952.9 | 1,906.1 | 1,881.7 | 1,897.5 | 1,836.4 | 1,762.6 | 1,379.5 | 541.5 | 527.6 | |||||||||||||||||||||
Investment Management | 567.8 | 534.9 | 474.0 | 418.5 | 454.9 | 517.6 | 515.0 | 508.7 | 447.5 | 400.6 | |||||||||||||||||||||
Lincoln UK | 318.4 | 342.2 | 274.5 | 275.4 | 278.2 | 430.6 | 443.6 | 438.6 | 425.2 | 393.3 | |||||||||||||||||||||
Corporate & Other | 352.1 | 335.1 | 284.2 | 355.0 | 1,815.9 | 1,951.9 | 1,951.6 | 1,690.6 | 1,402.2 | 1,560.0 | |||||||||||||||||||||
Total Operating Revenue | 5,489.8 | 5,293.2 | 4,923.9 | 4,916.1 | 6,479.6 | 6,875.4 | 6,800.7 | 6,068.0 | 4,775.9 | 4,641.1 | |||||||||||||||||||||
Realized gains (losses) on investments | |||||||||||||||||||||||||||||||
and derivatives | (23.3 | ) | (61.3 | ) | (19.8 | ) | (271.5 | ) | (114.5 | ) | (28.3 | ) | 3.0 | 19.0 | 122.6 | 92.5 | |||||||||||||||
Net gain on reinsurance derivative/trading | |||||||||||||||||||||||||||||||
account securities | 5.9 | 3.1 | 4.7 | - | - | - | - | - | - | - | |||||||||||||||||||||
Gain (loss) on sale of subsidiaries/ businesses | 14.2 | 135.0 | - | (8.3 | ) | 12.8 | - | - | - | - | - | ||||||||||||||||||||
Mark to market adjustment on reclassification | |||||||||||||||||||||||||||||||
from AFS to trading account securities | - | - | 371.5 | - | - | - | - | - | - | - | |||||||||||||||||||||
Amortization of deferred gain-reserve development | 1.3 | 1.3 | 3.6 | (0.8 | ) | - | - | - | - | - | - | ||||||||||||||||||||
Total Revenue | $ | 5,487.9 | $ | 5,371.3 | $ | 5,283.9 | $ | 4,635.5 | $ | 6,378.0 | $ | 6,847.1 | $ | 6,803.7 | $ | 6,087.1 | $ | 4,898.5 | $ | 4,733.6 | |||||||||||
Income from Operations | |||||||||||||||||||||||||||||||
Lincoln Retirement | $ | 471.5 | $ | 414.6 | $ | 331.9 | $ | 183.4 | $ | 316.2 | $ | 358.1 | $ | 299.4 | $ | 262.4 | $ | 223.0 | $ | 174.6 | |||||||||||
Life Insurance | 298.9 | 280.3 | 264.5 | 269.0 | 275.3 | 256.7 | 212.0 | 149.2 | 39.9 | 41.2 | |||||||||||||||||||||
Investment Management | 36.0 | 43.6 | 34.5 | 1.8 | (6.1 | ) | 25.0 | 61.0 | 43.9 | 18.1 | 18.6 | ||||||||||||||||||||
Lincoln UK | 43.4 | 43.5 | 43.6 | 34.6 | 58.1 | 59.2 | (13.9 | ) | 70.9 | (108.3 | ) | 66.0 | |||||||||||||||||||
Corporate & Other | 1.8 | (57.2 | ) | (81.8 | ) | (57.2 | ) | 1.0 | (16.0 | ) | (83.1 | ) | 4.0 | (223.3 | ) | (1.7 | ) | ||||||||||||||
Operating Income from Cont Oper | 851.6 | 724.8 | 592.8 | 431.6 | 644.4 | 683.0 | 475.5 | 530.4 | (50.6 | ) | 298.8 | ||||||||||||||||||||
Discontinued Operations | - | - | - | - | - | - | - | - | 110.1 | 135.3 | |||||||||||||||||||||
Income from Operations | 851.6 | 724.8 | 592.8 | 431.6 | 644.4 | 683.0 | 475.5 | 530.4 | 59.4 | 434.1 | |||||||||||||||||||||
Realized gains (losses) on investments and derivatives | (14.5 | ) | (37.4 | ) | (12.6 | ) | (176.4 | ) | (73.5 | ) | (17.5 | ) | 3.8 | 13.7 | 72.9 | 57.6 | |||||||||||||||
Net gain (loss) on reinsurance | |||||||||||||||||||||||||||||||
derivative/trading account securities | 3.0 | (0.6 | ) | 2.7 | - | - | - | - | - | - | - | ||||||||||||||||||||
Gain (loss) on sale of subsidiaries/ businesses | 9.3 | 61.9 | - | (9.4 | ) | 15.0 | - | - | - | - | - | ||||||||||||||||||||
Mark to market adjustment on reclassification | |||||||||||||||||||||||||||||||
from AFS to trading account securities | - | - | 241.5 | - | - | - | - | - | - | - | |||||||||||||||||||||
Restructuring charges | (19.1 | ) | (13.9 | ) | (35.0 | ) | 2.0 | (24.7 | ) | (80.2 | ) | (18.9 | ) | (34.3 | ) | - | - | ||||||||||||||
Loss on early retirement of subordinated debt | - | (4.1 | ) | (3.7 | ) | - | - | - | - | - | - | - | |||||||||||||||||||
Reserve development/ amortization of related | |||||||||||||||||||||||||||||||
deferred gain | 0.9 | 0.9 | (18.5 | ) | (199.1 | ) | - | - | - | - | - | - | |||||||||||||||||||
Cumulative effect of accounting change | - | (24.5 | ) | (255.2 | ) | - | (15.6 | ) | - | - | |||||||||||||||||||||
Discontinued operations included in | |||||||||||||||||||||||||||||||
income from operations | - | - | - | - | - | - | - | - | (110.1 | ) | (135.3 | ) | |||||||||||||||||||
Income from Continuing Operations | 831.1 | 707.0 | 511.9 | 48.8 | 545.7 | 585.3 | 460.4 | 509.8 | 22.2 | 356.4 | |||||||||||||||||||||
Discontinued Operations included | |||||||||||||||||||||||||||||||
in Income from Operations | - | - | - | - | - | - | - | - | 911.8 | 157.2 | |||||||||||||||||||||
Net Income | $ | 831.1 | $ | 707.0 | $ | 511.9 | $ | 48.8 | $ | 545.7 | $ | 585.3 | $ | 460.4 | $ | 509.8 | $ | 934.0 | $ | 513.6 | |||||||||||
OTHER DATA | |||||||||||||||||||||||||||||||
Assets | $ | 124,787.6 | $ | 116,219.3 | $ | 106,744.9 | $ | 93,184.6 | $ | 98,041.6 | $ | 99,870.6 | $ | 103,095.7 | $ | 93,836.3 | $ | 77,174.7 | $ | 71,713.4 | |||||||||||
Shareholders' Equity | |||||||||||||||||||||||||||||||
Including AOCI | $ | 6,384.4 | $ | 6,175.6 | $ | 5,811.6 | $ | 5,347.5 | $ | 5,303.8 | $ | 4,980.6 | $ | 4,263.9 | $ | 5,387.9 | $ | 4,982.9 | $ | 4,470.0 | |||||||||||
Excluding AOCI | 5,856.6 | 5,244.9 | 4,942.6 | 4,612.9 | 5,130.6 | 4,946.6 | 4,699.5 | 4,785.5 | 4,500.7 | 3,990.6 | |||||||||||||||||||||
Average Equity (excluding AOCI) | 5,512.2 | 5,075.5 | 4,756.7 | 4,983.3 | 5,057.1 | 4,831.4 | 4,786.2 | 4,636.3 | 4,172.7 | 3,851.7 | |||||||||||||||||||||
Common Shares Outstanding (millions) | |||||||||||||||||||||||||||||||
End of Period - Diluted | 176.9 | 176.1 | 180.7 | 178.5 | 189.3 | 193.2 | 197.0 | 203.4 | 204.7 | 209.5 | |||||||||||||||||||||
Average for the Period - Diluted | 176.1 | 179.0 | 179.4 | 184.6 | 191.5 | 193.0 | 200.4 | 203.3 | 208.0 | 208.0 | |||||||||||||||||||||
Per Share Data (Diluted) | |||||||||||||||||||||||||||||||
Net Income from Continuing Operations | $ | 4.72 | $ | 3.95 | $ | 2.85 | $ | 0.26 | $ | 2.85 | $ | 3.03 | $ | 2.30 | $ | 2.51 | $ | 0.11 | $ | 1.71 | |||||||||||
Net Income | 4.72 | 3.95 | 2.85 | 0.26 | 2.85 | 3.03 | 2.30 | 2.51 | 4.49 | 2.47 | |||||||||||||||||||||
Income (Loss) from Continuing Operations | 4.83 | 4.05 | 3.30 | 2.34 | 3.37 | 3.54 | 2.37 | 2.61 | (0.24 | ) | 1.44 | ||||||||||||||||||||
Income from Operations | 4.83 | 4.05 | 3.30 | 2.34 | 3.37 | 3.54 | 2.37 | 2.61 | 0.29 | 2.09 | |||||||||||||||||||||
Shareholders' Equity Per Share | |||||||||||||||||||||||||||||||
Shareholders' Equity (Including AOCI) | $ | 36.69 | $ | 35.53 | $ | 32.56 | $ | 30.10 | $ | 28.32 | $ | 26.05 | $ | 21.76 | $ | 26.59 | $ | 24.63 | $ | 21.50 | |||||||||||
Shareholders' Equity (Excluding AOCI) | 33.66 | 30.17 | 27.69 | 25.97 | 27.39 | 25.88 | 23.98 | 23.62 | 22.25 | 19.19 | |||||||||||||||||||||
Dividends Declared (Common Stock) | 1.475 | 1.415 | 1.355 | 1.295 | 1.235 | 1.175 | 1.115 | 1.055 | 0.995 | 0.935 | |||||||||||||||||||||
Return on Equity | |||||||||||||||||||||||||||||||
Net Income/Average Equity | 15.1 | % | 13.9 | % | 10.8 | % | 1.0 | % | 10.8 | % | 12.1 | % | 9.6 | % | 11.0 | % | 22.4 | % | 13.3 | % | |||||||||||
Inc from Operations/Average Equity | 15.4 | % | 14.3 | % | 12.5 | % | 8.7 | % | 12.7 | % | 14.1 | % | 9.9 | % | 11.4 | % | 1.4 | % | 11.3 | % | |||||||||||
Market Value of Common Stock | |||||||||||||||||||||||||||||||
High for the Year | $ | 54.41 | $ | 50.38 | $ | 41.32 | $ | 53.65 | $ | 52.75 | $ | 56.38 | $ | 57.50 | $ | 49.44 | $ | 39.06 | $ | 28.50 | |||||||||||
Low for the Year | 41.59 | 40.06 | 24.73 | 25.15 | 38.00 | 22.63 | 36.00 | 33.50 | 24.50 | 20.38 | |||||||||||||||||||||
Close for the Year | 53.03 | 46.68 | 40.37 | 31.58 | 48.57 | 47.31 | 40.00 | 40.91 | 39.06 | 26.25 |
3/31/2006 | PAGE 8 | |||||||||||||||||||||||||||
Quarterly Summary | ||||||||||||||||||||||||||||
Unaudited [Millions of Dollars, except Common Share Data] | ||||||||||||||||||||||||||||
Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | ||||||||||||||||||||
For the Quarter Ended | 2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | |||||||||||||||||||
Operating Revenue | ||||||||||||||||||||||||||||
Lincoln Retirement | $ | 528.0 | $ | 534.4 | $ | 526.2 | $ | 539.4 | $ | 538.5 | $ | 573.0 | $ | 573.1 | $ | 573.3 | $ | 586.7 | ||||||||||
Life Insurance | 483.4 | 484.8 | 481.1 | 503.7 | 484.2 | 497.3 | 492.4 | 519.6 | 515.0 | |||||||||||||||||||
Investment Management | 135.2 | 139.0 | 133.0 | 127.7 | 130.4 | 138.0 | 146.8 | 152.7 | 162.6 | |||||||||||||||||||
Lincoln UK | 76.1 | 81.0 | 95.8 | 89.3 | 74.6 | 78.4 | 102.8 | 62.5 | 69.5 | |||||||||||||||||||
Corporate & Other | 56.1 | 105.5 | 92.4 | 81.1 | 73.8 | 95.2 | 93.8 | 89.2 | 83.9 | |||||||||||||||||||
Total Operating Revenue | 1,278.8 | 1,344.7 | 1,328.5 | 1,341.2 | 1,301.5 | 1,382.0 | 1,409.0 | 1,397.4 | 1,417.8 | |||||||||||||||||||
Realized gains (losses) on investments and derivatives | (15.9 | ) | (20.6 | ) | (27.5 | ) | 6.7 | (7.2 | ) | (4.0 | ) | (1.6 | ) | (9.3 | ) | (6.9 | ) | |||||||||||
Net gain (loss) on reinsurance | ||||||||||||||||||||||||||||
derivative/trading account securities | (4.2 | ) | 10.3 | (5.6 | ) | (1.4 | ) | 4.4 | (5.1 | ) | 5.3 | 0.0 | 5.9 | |||||||||||||||
Gain on sale of subsidiaries/ businesses | - | 24.1 | 110.3 | 0.6 | 14.2 | - | - | - | - | |||||||||||||||||||
Amortization of deferred gain-reserve development | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | |||||||||||||||||||
Total Revenue | $ | 1,259.0 | $ | 1,358.7 | $ | 1,406.1 | $ | 1,347.5 | $ | 1,313.2 | $ | 1,373.2 | $ | 1,413.1 | $ | 1,388.4 | $ | 1,417.0 | ||||||||||
Income from Operations | ||||||||||||||||||||||||||||
Lincoln Retirement | $ | 102.2 | $ | 101.8 | $ | 110.2 | $ | 100.5 | $ | 98.6 | $ | 119.4 | $ | 136.2 | $ | 117.3 | $ | 123.1 | ||||||||||
Life Insurance | 74.8 | 76.2 | 55.4 | 74.0 | 67.7 | 75.8 | 75.1 | 80.2 | 82.2 | |||||||||||||||||||
Investment Management | 12.5 | 13.4 | 12.5 | 5.2 | 7.4 | 3.9 | 10.2 | 14.6 | 20.3 | |||||||||||||||||||
Lincoln UK | 6.2 | 10.7 | 10.1 | 16.6 | 10.0 | 10.3 | 9.6 | 13.5 | 10.7 | |||||||||||||||||||
Corporate & Other | (20.3 | ) | (20.7 | ) | (9.9 | ) | (6.3 | ) | (11.3 | ) | 9.2 | (2.9 | ) | 6.7 | (14.6 | ) | ||||||||||||
Income from Operations | 175.3 | 181.4 | 178.2 | 189.9 | 172.5 | 218.6 | 228.2 | 232.3 | 221.8 | |||||||||||||||||||
Realized gains (losses) on investments and derivatives | (10.3 | ) | (13.4 | ) | (17.9 | ) | 4.3 | (4.6 | ) | (2.7 | ) | (1.1 | ) | (6.1 | ) | (4.4 | ) | |||||||||||
Net gain (loss) on reinsurance | ||||||||||||||||||||||||||||
derivative/trading account securities | (2.7 | ) | 6.7 | (3.7 | ) | (0.8 | ) | 2.8 | (3.3 | ) | 3.5 | 0.0 | 3.8 | |||||||||||||||
Gain on sale of subsidiaries/ businesses | - | 15.6 | 45.9 | 0.4 | 9.3 | - | - | - | - | |||||||||||||||||||
Reserve development/ amortization of related deferred gain | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | 0.2 | |||||||||||||||||||
Restructuring charges | (7.5 | ) | (3.5 | ) | (2.9 | ) | (0.0 | ) | (1.3 | ) | (15.0 | ) | (1.8 | ) | (1.1 | ) | (0.2 | ) | ||||||||||
Loss on early retirement of debt | - | - | - | (4.1 | ) | - | - | - | - | - | ||||||||||||||||||
Income Before Cumulative Effect of | ||||||||||||||||||||||||||||
Accounting Change | 155.0 | 187.0 | 199.7 | 189.9 | 178.9 | 197.9 | 228.9 | 225.3 | 221.2 | |||||||||||||||||||
Cumulative effect of accounting change, net of tax | (24.5 | ) | (0.0 | ) | - | - | - | - | - | - | - | |||||||||||||||||
Net Income | $ | 130.5 | $ | 187.0 | $ | 199.7 | $ | 189.9 | $ | 178.9 | $ | 197.9 | $ | 228.9 | $ | 225.3 | $ | 221.2 | ||||||||||
OTHER DATA | ||||||||||||||||||||||||||||
Assets | $ | 109,869.9 | $ | 109,317.9 | $ | 110,377.1 | $ | 116,219.3 | $ | 116,352.2 | $ | 118,953.4 | $ | 122,104.6 | $ | 124,787.6 | $ | 128,393.9 | ||||||||||
Shareholders' Equity | ||||||||||||||||||||||||||||
Beg of Period (including AOCI) | $ | 5,811.6 | $ | 6,143.5 | $ | 5,518.9 | $ | 5,970.8 | $ | 6,175.6 | $ | 6,042.9 | $ | 6,363.5 | $ | 6,284.4 | $ | 6,384.4 | ||||||||||
End of Period (including AOCI) | 6,143.5 | 5,518.9 | 5,970.8 | 6,175.6 | 6,042.9 | 6,363.5 | 6,284.4 | 6,384.4 | 6,338.2 | |||||||||||||||||||
End of Period (excluding AOCI) | 5,004.2 | 5,023.6 | 5,109.8 | 5,244.9 | 5,365.8 | 5,448.3 | 5,663.5 | 5,856.6 | 6,053.2 | |||||||||||||||||||
Average Equity (excluding AOCI) | 5,016.8 | 5,024.6 | 5,075.7 | 5,185.0 | 5,338.8 | 5,392.3 | 5,559.8 | 5,757.7 | 5,954.9 | |||||||||||||||||||
Common Shares Outstanding | ||||||||||||||||||||||||||||
Average for the Period - Diluted | 181.2 | 180.3 | 177.7 | 176.7 | 176.6 | 175.4 | 175.8 | 176.6 | 177.9 | |||||||||||||||||||
End of Period - Diluted | 181.4 | 178.8 | 177.1 | 176.1 | 176.5 | 174.8 | 176.3 | 176.9 | 178.5 | |||||||||||||||||||
Per Share Data (Diluted) | ||||||||||||||||||||||||||||
Net Income | $ | 0.72 | $ | 1.04 | $ | 1.12 | $ | 1.07 | $ | 1.01 | $ | 1.13 | $ | 1.30 | $ | 1.28 | $ | 1.24 | ||||||||||
Income from Operations | 0.97 | 1.00 | 1.00 | 1.07 | 0.98 | 1.25 | 1.30 | 1.31 | 1.25 | |||||||||||||||||||
Shareholders' Equity Per Share | ||||||||||||||||||||||||||||
Shareholders' Equity (including AOCI) | $ | 34.36 | $ | 31.32 | $ | 34.15 | $ | 35.53 | $ | 34.74 | $ | 36.86 | $ | 36.23 | $ | 36.69 | $ | 35.99 | ||||||||||
Shareholders' Equity (excluding AOCI) | 27.99 | 28.51 | 29.23 | 30.17 | 30.85 | 31.56 | 32.65 | 33.66 | 34.37 | |||||||||||||||||||
Dividends Declared (Common Stock) | 0.350 | 0.350 | 0.350 | 0.365 | 0.365 | 0.365 | 0.365 | 0.380 | 0.380 | |||||||||||||||||||
Return on Equity | ||||||||||||||||||||||||||||
Net Income/Average Equity | 10.4 | % | 14.9 | % | 15.7 | % | 14.6 | % | 13.4 | % | 14.7 | % | 16.5 | % | 15.7 | % | 14.9 | % | ||||||||||
Inc from Operations/Average Equity | 14.0 | % | 14.4 | % | 14.0 | % | 14.7 | % | 12.9 | % | 16.2 | % | 16.4 | % | 16.1 | % | 14.9 | % | ||||||||||
Market Value of Common Stock | ||||||||||||||||||||||||||||
Highest Price | $ | 48.87 | $ | 50.38 | $ | 47.50 | $ | 48.70 | $ | 49.42 | $ | 47.77 | $ | 52.42 | $ | 54.41 | $ | 57.97 | ||||||||||
Lowest Price | 40.06 | 43.26 | 41.90 | 40.79 | 44.36 | 41.59 | 46.59 | 46.94 | 52.00 | |||||||||||||||||||
Closing Price | 47.32 | 47.25 | 47.00 | 46.68 | 45.14 | 46.92 | 52.02 | 53.03 | 54.59 |
3/31/2006 | PAGE 9 | |||||||||||||||
Consolidated Statements of Income | ||||||||||||||||
Unaudited [Millions of Dollars] | ||||||||||||||||
For the Year Ended December 31 | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||
Revenue | ||||||||||||||||
Premiums | $ | 1,704.0 | $ | 315.9 | $ | 281.0 | $ | 298.9 | $ | 308.4 | ||||||
Surrender charges | 101.5 | 87.8 | 84.7 | 78.7 | 73.3 | |||||||||||
Mortality assessments | 533.3 | 530.3 | 550.5 | 558.3 | 568.3 | |||||||||||
Expense assessments | 880.1 | 792.7 | 782.3 | 949.3 | 1,120.6 | |||||||||||
Investment advisory fees | 197.2 | 183.3 | 205.0 | 252.5 | 279.0 | |||||||||||
Amortization of deferred gain | 20.4 | 75.2 | 72.3 | 87.0 | 75.7 | |||||||||||
Amortization of deferred gain-reserve development | - | (0.8 | ) | 3.6 | 1.3 | 1.3 | ||||||||||
Other revenue and fees | 328.7 | 299.5 | 309.7 | 364.4 | 362.3 | |||||||||||
Net investment income | 2,708.7 | 2,631.9 | 2,638.5 | 2,704.1 | 2,702.3 | |||||||||||
Earnings in unconsolidated affiliates | 5.7 | (0.6 | ) | - | - | - | ||||||||||
Realized gains (losses) on investments | (105.2 | ) | (272.7 | ) | (16.7 | ) | (45.7 | ) | (21.7 | ) | ||||||
Gains (losses) on derivatives | (9.3 | ) | 1.2 | (2.5 | ) | (11.6 | ) | (0.5 | ) | |||||||
Net gain (loss) on reinsurance | ||||||||||||||||
derivative/trading account securities | - | - | 4.1 | (1.0 | ) | 4.7 | ||||||||||
Gain on sale of subsidiaries/ businesses | 12.8 | (8.3 | ) | - | 135.0 | 14.2 | ||||||||||
Mark-to-market adjustment on reclassification | ||||||||||||||||
from AFS to trading account securities | - | - | 371.5 | - | - | |||||||||||
Total Revenue | 6,378.0 | 4,635.5 | 5,283.9 | 5,371.3 | 5,487.9 | |||||||||||
Benefits and Expenses | ||||||||||||||||
Ins. benefits paid or provided: | ||||||||||||||||
Policy benefits | 1,820.0 | 861.0 | 697.8 | 696.2 | 761.6 | |||||||||||
Div accum & div to policyholders | 83.7 | 76.0 | 81.6 | 77.4 | 77.7 | |||||||||||
Interest credited to policy bal. | 1,506.0 | 1,617.1 | 1,617.0 | 1,570.6 | 1,570.1 | |||||||||||
Reserve developments on reins. business sold | - | 305.4 | 32.1 | - | - | |||||||||||
Def. sales inducements net of amortization | (12.1 | ) | (12.6 | ) | (14.1 | ) | (40.6 | ) | (43.9 | ) | ||||||
Total insurance benefits | 3,397.7 | 2,846.9 | 2,414.4 | 2,303.7 | 2,365.6 | |||||||||||
Underwriting, acquisition, | ||||||||||||||||
insurance and other expenses: | ||||||||||||||||
Commissions and other volume related expenses | 1,045.2 | 836.1 | 904.6 | 1,133.1 | 1,287.2 | |||||||||||
Operating and administrative expenses | 1,114.5 | 928.0 | 894.4 | 897.4 | 914.1 | |||||||||||
Restructuring charges | 38.0 | (2.2 | ) | 53.8 | 21.4 | 29.5 | ||||||||||
Taxes, licenses and fees | 122.9 | 106.8 | 107.4 | 103.6 | 95.3 | |||||||||||
Foreign exchange | (1.4 | ) | 0.3 | (0.0 | ) | - | - | |||||||||
Subtotal | 2,319.1 | 1,869.0 | 1,960.2 | 2,155.5 | 2,326.1 | |||||||||||
DAC deferral net of amortization | (334.2 | ) | (268.0 | ) | (321.6 | ) | (354.1 | ) | (442.1 | ) | ||||||
VOBA amortization | 113.1 | 136.5 | 80.2 | 120.3 | 67.2 | |||||||||||
Other intangibles amortization | 12.1 | 8.2 | 7.9 | 9.7 | 7.8 | |||||||||||
Total underwriting, acquisition, | ||||||||||||||||
insurance and other expenses | 2,110.1 | 1,745.8 | 1,726.8 | 1,931.5 | 1,959.0 | |||||||||||
Goodwill amortization | 43.4 | - | - | - | - | |||||||||||
Interest | 121.0 | 96.6 | 89.5 | 94.1 | 88.7 | |||||||||||
Loss on early retirement of debt | 5.6 | 6.3 | ||||||||||||||
Total Benefits and Expenses | 5,672.1 | 4,689.3 | 4,236.3 | 4,335.6 | 4,413.3 | |||||||||||
Income (Loss) Before Federal Income Tax and | ||||||||||||||||
Cumulative Effect of Accounting Change | 705.9 | (53.8 | ) | 1,047.6 | 1,035.7 | 1,074.6 | ||||||||||
Federal income taxes | 144.7 | (102.6 | ) | 280.4 | 304.1 | 243.6 | ||||||||||
Income Before Cumulative Effect of | ||||||||||||||||
Accounting Change | 561.2 | 48.8 | 767.2 | 731.5 | 831.1 | |||||||||||
Cumulative effect of accounting change | (15.6 | ) | - | (255.2 | ) | (24.5 | ) | - | ||||||||
Net Income | $ | 545.7 | $ | 48.8 | $ | 511.9 | $ | 707.0 | $ | 831.1 | ||||||
Roll Forward of Deferred Acquisition Costs | ||||||||||||||||
Balance at beginning of period | $ | 3,070.5 | $ | 2,866.8 | $ | 2,939.7 | $ | 3,147.1 | $ | 3,445.0 | ||||||
Deferral | 701.0 | 612.4 | 639.6 | 844.8 | 903.2 | |||||||||||
Amortization | (366.8 | ) | (344.4 | ) | (318.0 | ) | (490.8 | ) | (461.1 | ) | ||||||
Included in Total Benefits and Expenses | 334.2 | 268.0 | 321.6 | 354.1 | 442.1 | |||||||||||
Adjustment related to realized (gains) losses | ||||||||||||||||
on available-for-sale securities | 112.9 | 115.0 | (50.2 | ) | (45.7 | ) | (48.5 | ) | ||||||||
Adjustment related to unrealized (gains) losses | ||||||||||||||||
on available-for-sale securities | (187.2 | ) | (338.5 | ) | (126.1 | ) | (14.8 | ) | 313.1 | |||||||
Foreign currency translation adjustment | (16.0 | ) | 56.9 | 62.1 | 42.9 | (59.5 | ) | |||||||||
Disposition of business | (425.9 | ) | - | - | - | - | ||||||||||
Other | (21.7 | ) | (28.4 | ) | - | (38.7 | ) | - | ||||||||
Balance at end of period | $ | 2,866.7 | $ | 2,939.9 | $ | 3,147.1 | $ | 3,445.0 | $ | 4,092.2 | ||||||
Roll Forward of Value of Business Acquired | ||||||||||||||||
Balance at beginning of period | $ | 1,483.3 | $ | 1,362.5 | $ | 1,250.1 | $ | 1,196.5 | $ | 1,095.2 | ||||||
Amortization | (113.1 | ) | (136.5 | ) | (80.2 | ) | (120.3 | ) | (67.2 | ) | ||||||
Foreign currency translation adjustment | (7.0 | ) | 24.1 | 26.6 | 19.6 | (29.0 | ) | |||||||||
Other | (0.7 | ) | - | - | (0.6 | ) | - | |||||||||
Balance at end of period | $ | 1,362.5 | $ | 1,250.1 | $ | 1,196.5 | $ | 1,095.2 | $ | 998.9 | ||||||
Roll Forward of Deferred Front-End Load* | ||||||||||||||||
Balance at beginning of period | $ | 550.6 | $ | 589.7 | $ | 656.8 | $ | 750.6 | $ | 764.1 | ||||||
Deferral | 107.5 | 102.5 | 102.5 | 104.6 | 89.1 | |||||||||||
Amortization | (57.8 | ) | (75.7 | ) | (54.4 | ) | (122.8 | ) | (85.8 | ) | ||||||
Included in Income from Operations | 49.7 | 26.8 | 48.1 | (18.2 | ) | 3.3 | ||||||||||
Foreign currency translation adjustment | (10.6 | ) | 40.2 | 45.8 | 31.7 | (43.9 | ) | |||||||||
Balance at end of period | $ | 589.7 | $ | 656.8 | $ | 750.6 | $ | 764.1 | $ | 723.6 | ||||||
* Included in Insurance and Investment Contract Liabilities on the Balance Sheet |
3/31/2006 | PAGE 10 | |||||||||||||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||||||||||||||
Unaudited [Millions of Dollars] | ||||||||||||||||||||||||||||
For the Quarter Ended | Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | |||||||||||||||||||
2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | ||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||||
Premiums | $ | 75.6 | $ | 74.0 | $ | 70.6 | $ | 78.7 | $ | 70.4 | $ | 72.6 | $ | 83.1 | $ | 82.4 | $ | 78.3 | ||||||||||
Surrender charges | 20.2 | 19.2 | 18.2 | 21.1 | 20.1 | 16.6 | 18.7 | 18.0 | 18.8 | |||||||||||||||||||
Mortality assessments | 137.9 | 140.1 | 139.8 | 140.4 | 142.3 | 142.1 | 138.8 | 145.1 | 146.2 | |||||||||||||||||||
Expense assessments | 225.5 | 230.9 | 234.5 | 258.5 | 256.6 | 268.1 | 287.3 | 308.5 | 310.9 | |||||||||||||||||||
Investment advisory fees | 62.7 | 66.4 | 67.4 | 56.0 | 59.4 | 66.9 | 73.6 | 79.0 | 84.9 | |||||||||||||||||||
Amortization of deferred gain | 17.9 | 17.9 | 32.1 | 19.1 | 18.9 | 18.9 | 18.9 | 18.9 | 18.8 | |||||||||||||||||||
Amortization of deferred gain-reserve development | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | |||||||||||||||||||
Other revenue and fees | 61.4 | 112.9 | 96.6 | 93.4 | 74.0 | 93.2 | 117.7 | 77.3 | 81.6 | |||||||||||||||||||
Net investment income | 677.5 | 683.1 | 669.4 | 674.1 | 659.8 | 703.6 | 670.8 | 668.1 | 678.3 | |||||||||||||||||||
Realized gains (losses) on investments | (12.0 | ) | (17.8 | ) | (23.0 | ) | 7.2 | (8.7 | ) | (0.6 | ) | (2.7 | ) | (9.6 | ) | (10.5 | ) | |||||||||||
Gains (losses) on derivatives | (3.8 | ) | (2.8 | ) | (4.5 | ) | (0.4 | ) | 1.5 | (3.4 | ) | 1.2 | 0.2 | 3.5 | ||||||||||||||
Gain (loss) on reinsurance | ||||||||||||||||||||||||||||
derivative/trading account securities | (4.2 | ) | 10.3 | (5.6 | ) | (1.4 | ) | 4.4 | (5.1 | ) | 5.3 | 0.0 | 5.9 | |||||||||||||||
Gain (loss) on sale of subsidiaries/ businesses | - | 24.1 | 110.3 | 0.6 | 14.2 | - | - | - | - | |||||||||||||||||||
Mark-to-market adjustment on reclassification | ||||||||||||||||||||||||||||
from AFS to trading account securities | - | - | - | - | - | - | - | - | - | |||||||||||||||||||
Total Revenue | 1,259.0 | 1,358.7 | 1,406.1 | 1,347.5 | 1,313.2 | 1,373.2 | 1,413.1 | 1,388.4 | 1,417.0 | |||||||||||||||||||
Benefits and Expenses | ||||||||||||||||||||||||||||
Ins. benefits paid or provided: | ||||||||||||||||||||||||||||
Policy benefits | 183.5 | 184.1 | 157.3 | 171.4 | 174.1 | 194.8 | 213.2 | 179.5 | 185.7 | |||||||||||||||||||
Div accum & div to policyholders | 18.5 | 18.6 | 16.7 | 23.6 | 18.4 | 18.4 | 17.3 | 23.6 | 17.4 | |||||||||||||||||||
Interest credited to policy bal. | 390.4 | 390.4 | 392.5 | 397.4 | 389.5 | 391.8 | 394.2 | 394.7 | 391.8 | |||||||||||||||||||
Def. sales inducements net of amortization | (9.0 | ) | (9.8 | ) | (10.4 | ) | (11.5 | ) | (9.4 | ) | (11.7 | ) | (11.5 | ) | (11.3 | ) | (10.5 | ) | ||||||||||
Total insurance benefits | 583.3 | 583.3 | 556.1 | 580.9 | 572.6 | 593.3 | 613.2 | 586.5 | 584.4 | |||||||||||||||||||
Underwriting, acquisition, | ||||||||||||||||||||||||||||
insurance and other expenses: | ||||||||||||||||||||||||||||
Commissions and other volume related expenses | 278.9 | 277.7 | 245.1 | 331.3 | 285.0 | 312.2 | 332.8 | 357.2 | 333.7 | |||||||||||||||||||
Operating and administrative expenses | 187.4 | 252.3 | 264.6 | 193.1 | 212.4 | 235.2 | 249.1 | 217.3 | 200.2 | |||||||||||||||||||
Restructuring charges | 11.5 | 5.3 | 4.5 | 0.1 | 1.9 | 23.2 | 2.7 | 1.7 | 0.3 | |||||||||||||||||||
Taxes, licenses and fees | 29.5 | 27.2 | 25.6 | 21.3 | 30.9 | 23.1 | 24.1 | 17.2 | 33.4 | |||||||||||||||||||
Subtotal | 507.4 | 562.6 | 539.8 | 545.8 | 530.2 | 593.7 | 608.8 | 593.4 | 567.6 | |||||||||||||||||||
DAC deferral net of amortization | (89.9 | ) | (93.9 | ) | (85.4 | ) | (84.9 | ) | (70.7 | ) | (92.3 | ) | (153.8 | ) | (125.4 | ) | (90.6 | ) | ||||||||||
VOBA amortization | 24.8 | 20.5 | 50.8 | 24.2 | 18.9 | 16.5 | 18.2 | 13.6 | 17.2 | |||||||||||||||||||
Other intangibles amortization | 2.0 | 2.0 | 2.0 | 3.8 | 1.9 | 1.9 | 2.0 | 2.0 | 2.0 | |||||||||||||||||||
Total underwriting, acquisition, | ||||||||||||||||||||||||||||
insurance and other expenses | 444.3 | 491.2 | 507.1 | 488.9 | 480.4 | 519.8 | 475.2 | 483.6 | 496.1 | |||||||||||||||||||
Interest | 22.8 | 24.7 | 24.4 | 22.2 | 22.4 | 22.1 | 21.7 | 22.4 | 21.7 | |||||||||||||||||||
Loss on early retirement of debt | - | - | - | 6.3 | - | - | - | - | - | |||||||||||||||||||
Total Benefits and Expenses | 1,050.4 | 1,099.1 | 1,087.7 | 1,098.4 | 1,075.4 | 1,135.2 | 1,110.1 | 1,092.5 | 1,102.1 | |||||||||||||||||||
Income Before Federal Income Tax and | ||||||||||||||||||||||||||||
Cumulative Effect of Accounting Change | 208.6 | 259.6 | 318.4 | 249.1 | 237.8 | 238.0 | 303.0 | 295.9 | 314.9 | |||||||||||||||||||
Federal income taxes | 53.7 | 72.6 | 118.7 | 59.2 | 58.9 | 40.1 | 74.0 | 70.6 | 93.6 | |||||||||||||||||||
Income Before Cumulative Effect of | ||||||||||||||||||||||||||||
Accounting Change | 155.0 | 187.0 | 199.7 | 189.9 | 178.9 | 197.9 | 228.9 | 225.3 | 221.2 | |||||||||||||||||||
Cumulative effect of accounting change | (24.5 | ) | (0.0 | ) | - | - | - | - | - | - | - | |||||||||||||||||
Net Income | $ | 130.5 | $ | 187.0 | $ | 199.7 | $ | 189.9 | $ | 178.9 | $ | 197.9 | $ | 228.9 | $ | 225.3 | $ | 221.2 | ||||||||||
Roll Forward of Deferred Acquisition Costs | ||||||||||||||||||||||||||||
Balance at beginning of period | $ | 3,147.1 | $ | 2,999.0 | $ | 3,521.4 | $ | 3,326.8 | $ | 3,445.0 | $ | 3,712.7 | $ | 3,554.5 | $ | 3,904.0 | $ | 4,092.2 | ||||||||||
Deferral | 198.7 | 201.8 | 206.2 | 238.1 | 203.5 | 215.0 | 229.9 | 253.5 | 235.1 | |||||||||||||||||||
Amortization | (108.8 | ) | (108.0 | ) | (120.8 | ) | (153.2 | ) | (132.8 | ) | (122.7 | ) | (76.1 | ) | (128.1 | ) | (144.5 | ) | ||||||||||
Included in Total Benefits and Expenses | 89.9 | 93.9 | 85.4 | 84.9 | 70.7 | 92.3 | 153.8 | 125.4 | 90.6 | |||||||||||||||||||
Adjustment related to realized (gains) losses | ||||||||||||||||||||||||||||
on available-for-sale securities | (17.6 | ) | (6.0 | ) | (6.2 | ) | (15.8 | ) | (11.7 | ) | (14.3 | ) | (13.8 | ) | (8.7 | ) | (10.9 | ) | ||||||||||
Adjustment related to unrealized (gains) losses | ||||||||||||||||||||||||||||
on available-for-sale securities | (201.1 | ) | 442.7 | (271.2 | ) | 14.7 | 215.7 | (204.8 | ) | 217.4 | 84.7 | 194.2 | ||||||||||||||||
Foreign currency translation adjustment | 19.9 | (8.4 | ) | (2.5 | ) | 33.8 | (7.0 | ) | (31.4 | ) | (8.0 | ) | (13.2 | ) | 5.1 | |||||||||||||
Other | (39.2 | ) | 0.2 | (0.2 | ) | 0.5 | (0.0 | ) | - | - | - | - | ||||||||||||||||
Balance at end of period | $ | 2,999.0 | $ | 3,521.4 | $ | 3,326.8 | $ | 3,445.0 | $ | 3,712.7 | $ | 3,554.5 | $ | 3,904.0 | $ | 4,092.2 | $ | 4,371.2 | ||||||||||
Roll Forward of Value of Business Acquired | ||||||||||||||||||||||||||||
Balance at beginning of period | $ | 1,198.0 | $ | 1,180.0 | $ | 1,155.8 | $ | 1,103.9 | $ | 1,095.2 | $ | 1,073.1 | $ | 1,041.7 | $ | 1,019.4 | $ | 998.9 | ||||||||||
Amortization | (24.8 | ) | (20.5 | ) | (50.8 | ) | (24.2 | ) | (18.9 | ) | (16.5 | ) | (18.2 | ) | (13.6 | ) | (17.2 | ) | ||||||||||
Foreign currency translation adjustment | 7.4 | (3.7 | ) | (1.1 | ) | 15.6 | (3.3 | ) | (14.8 | ) | (4.1 | ) | (6.9 | ) | 2.7 | |||||||||||||
Other | (0.6 | ) | - | - | - | - | - | - | - | - | ||||||||||||||||||
Balance at end of period | $ | 1,180.0 | $ | 1,155.8 | $ | 1,103.9 | $ | 1,095.2 | $ | 1,073.1 | $ | 1,041.7 | $ | 1,019.4 | $ | 998.9 | $ | 984.4 | ||||||||||
Roll Forward of Deferred Front-End Load* | ||||||||||||||||||||||||||||
Balance at beginning of period | $ | 750.6 | $ | 768.5 | $ | 764.7 | $ | 744.4 | $ | 764.1 | $ | 756.2 | $ | 731.4 | $ | 721.2 | $ | 723.6 | ||||||||||
Deferral | 25.0 | 25.8 | 25.2 | 28.6 | 22.6 | 22.0 | 20.8 | 23.7 | 21.7 | |||||||||||||||||||
Amortization | (21.8 | ) | (23.3 | ) | (43.7 | ) | (34.0 | ) | (25.2 | ) | (23.6 | ) | (25.0 | ) | (11.9 | ) | (21.4 | ) | ||||||||||
Included in Income from Operations | 3.1 | 2.4 | (18.5 | ) | (5.3 | ) | (2.7 | ) | (1.5 | ) | (4.2 | ) | 11.8 | 0.3 | ||||||||||||||
Foreign currency translation adjustment | 14.7 | (6.2 | ) | (1.8 | ) | 25.0 | (5.2 | ) | (23.3 | ) | (5.9 | ) | (9.5 | ) | 3.8 | |||||||||||||
Balance at end of period | $ | 768.5 | $ | 764.7 | $ | 744.4 | $ | 764.1 | $ | 756.2 | $ | 731.4 | $ | 721.2 | $ | 723.6 | $ | 727.7 | ||||||||||
* Included in Insurance and Investment Contract Liabilities on the Balance Sheet |
3/31/2006 | PAGE 11 | ||||||||||||||||||||||||
Consolidating Statements of Income from Operations | |||||||||||||||||||||||||
Unaudited [Millions of Dollars] | |||||||||||||||||||||||||
Investment | |||||||||||||||||||||||||
For the Quarter Ended March 31 | Lincoln Retirement | Life Insurance | Management | Lincoln UK | |||||||||||||||||||||
Mar | Mar | Mar | Mar | Mar | Mar | Mar | Mar | ||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | ||||||||||||||||||
Operating Revenue | |||||||||||||||||||||||||
Premiums | $ | 10.3 | $ | 10.5 | $ | 51.2 | $ | 45.6 | $ | - | $ | - | $ | 16.5 | $ | 14.6 | |||||||||
Surrender charges | 7.6 | 7.4 | 10.3 | 12.0 | 0.8 | 0.7 | - | - | |||||||||||||||||
Mortality assessments | - | - | 138.4 | 133.3 | - | - | 7.8 | 9.0 | |||||||||||||||||
Expense assessments | 212.3 | 164.6 | 52.8 | 48.8 | 19.8 | 16.6 | 25.7 | 26.6 | |||||||||||||||||
Investment advisory fees | - | - | - | - | 110.0 | 84.2 | - | - | |||||||||||||||||
Other revenue and fees | (2.5 | ) | (1.4 | ) | 8.7 | 8.2 | 19.1 | 16.0 | 2.4 | 4.1 | |||||||||||||||
Net investment income | 358.9 | 357.4 | 253.6 | 236.3 | 12.9 | 12.9 | 17.0 | 20.3 | |||||||||||||||||
Total Operating Revenue | 586.7 | 538.5 | 515.0 | 484.2 | 162.6 | 130.4 | 69.5 | 74.6 | |||||||||||||||||
Operating Expenses | |||||||||||||||||||||||||
Ins. benefits paid or provided: | |||||||||||||||||||||||||
Policy benefits | 50.9 | 52.4 | 107.5 | 97.4 | - | - | 25.4 | 25.1 | |||||||||||||||||
Div accum & div to policyholders | - | - | 17.4 | 18.4 | - | - | - | - | |||||||||||||||||
Interest credited to policy bal. | 200.6 | 204.7 | 150.1 | 145.8 | 7.1 | 6.8 | - | - | |||||||||||||||||
Def. sales inducements net of amortization | (10.5 | ) | (9.4 | ) | - | - | - | - | - | - | |||||||||||||||
Total insurance benefits | 241.0 | 247.8 | 275.0 | 261.6 | 7.1 | 6.8 | 25.4 | 25.1 | |||||||||||||||||
Underwriting, acquisition, | |||||||||||||||||||||||||
insurance and other expenses: | |||||||||||||||||||||||||
Commissions and other volume related expenses | 173.0 | 149.7 | 87.4 | 77.2 | 16.7 | 14.8 | 0.9 | 0.6 | |||||||||||||||||
Operating and administrative expenses | 56.1 | 56.8 | 35.0 | 40.7 | 104.5 | 96.4 | 22.7 | 25.4 | |||||||||||||||||
Taxes, licenses and fees | 3.7 | 3.9 | 15.2 | 14.7 | 4.8 | 3.0 | 0.0 | - | |||||||||||||||||
Subtotal | 232.8 | 210.4 | 137.5 | 132.6 | 125.9 | 114.2 | 23.6 | 25.9 | |||||||||||||||||
DAC deferral net of amortization | (56.3 | ) | (49.4 | ) | (35.9 | ) | (25.2 | ) | (2.7 | ) | (3.3 | ) | 3.5 | 7.1 | |||||||||||
VOBA amortization | 2.7 | 2.4 | 13.9 | 15.5 | - | - | 0.5 | 1.0 | |||||||||||||||||
Other intangibles amortization | - | - | - | - | 2.0 | 1.9 | - | - | |||||||||||||||||
Total underwriting, acquisition, | |||||||||||||||||||||||||
insurance and other expenses | 179.2 | 163.3 | 115.6 | 122.9 | 125.2 | 112.8 | 27.6 | 34.0 | |||||||||||||||||
Total Operating Expenses | 420.2 | 411.1 | 390.6 | 384.5 | 132.3 | 119.6 | 52.9 | 59.2 | |||||||||||||||||
Income from Operations before federal taxes | 166.5 | 127.4 | 124.4 | 99.7 | 30.3 | 10.7 | 16.5 | 15.5 | |||||||||||||||||
Federal income taxes | 43.3 | 28.8 | 42.2 | 32.0 | 10.0 | 3.3 | 5.8 | 5.4 | |||||||||||||||||
Income from Operations | $ | 123.1 | $ | 98.6 | $ | 82.2 | $ | 67.7 | $ | 20.3 | $ | 7.4 | $ | 10.7 | $ | 10.0 |
3/31/2006 | PAGE 12 | ||||||||||||||||||
Consolidating Statements of Income from Operations | |||||||||||||||||||
Unaudited [Millions of Dollars] | |||||||||||||||||||
Corporate and | Consolidating | ||||||||||||||||||
For the Quarter Ended March 31 | Other Operations | Adjustments | Consolidated * | ||||||||||||||||
Mar | Mar | Mar | Mar | Mar | Mar | ||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | ||||||||||||||
Operating Revenue | |||||||||||||||||||
Premiums | $ | 0.3 | $ | (0.3 | ) | $ | - | $ | - | $ | 78.3 | $ | 70.4 | ||||||
Surrender charges | - | - | - | - | 18.8 | 20.1 | |||||||||||||
Mortality assessments | - | - | - | - | 146.2 | 142.3 | |||||||||||||
Expense assessments | 0.3 | - | - | - | 310.9 | 256.6 | |||||||||||||
Investment advisory fees | - | - | (25.1 | ) | (24.8 | ) | 84.9 | 59.4 | |||||||||||
Amortization of deferred gain | 18.8 | 18.9 | - | - | 18.8 | 18.9 | |||||||||||||
Other revenue and fees | 192.8 | 191.3 | (139.0 | ) | (144.2 | ) | 81.6 | 74.0 | |||||||||||
Net investment income | 36.6 | 34.0 | (0.8 | ) | (1.0 | ) | 678.3 | 659.8 | |||||||||||
Total Operating Revenue | 248.8 | 243.8 | (164.8 | ) | (170.0 | ) | 1,417.8 | 1,301.5 | |||||||||||
Operating Expenses | |||||||||||||||||||
Ins. benefits paid or provided: | |||||||||||||||||||
Policy benefits | 2.0 | (0.8 | ) | - | - | 185.7 | 174.1 | ||||||||||||
Div accum & div to policyholders | - | - | - | - | 17.4 | 18.4 | |||||||||||||
Interest credited to policy bal. | 33.9 | 32.1 | - | - | 391.8 | 389.5 | |||||||||||||
Def. sales inducements net of amortization | - | - | - | - | (10.5 | ) | (9.4 | ) | |||||||||||
Total insurance benefits | 35.9 | 31.3 | - | - | 584.4 | 572.6 | |||||||||||||
Underwriting, acquisition, | |||||||||||||||||||
insurance and other expenses: | |||||||||||||||||||
Commissions and other volume related expenses | 119.6 | 121.7 | (63.8 | ) | (78.9 | ) | 333.7 | 285.0 | |||||||||||
Operating and administrative expenses | 82.7 | 83.8 | (100.5 | ) | (90.4 | ) | 200.4 | 212.6 | |||||||||||
Taxes, licenses and fees | 9.6 | 9.3 | - | - | 33.4 | 30.9 | |||||||||||||
Subtotal | 211.9 | 214.7 | (164.3 | ) | (169.3 | ) | 567.4 | 528.5 | |||||||||||
DAC deferral net of amortization | 0.8 | 0.1 | - | - | (90.6 | ) | (70.7 | ) | |||||||||||
VOBA amortization | - | - | - | - | 17.2 | 18.9 | |||||||||||||
Other intangibles amortization | - | - | - | - | 2.0 | 1.9 | |||||||||||||
Total underwriting, acquisition, | |||||||||||||||||||
insurance and other expenses | 212.7 | 214.8 | (164.3 | ) | (169.3 | ) | 495.9 | 478.7 | |||||||||||
Interest | 22.0 | 22.9 | (0.5 | ) | (0.7 | ) | 21.5 | 22.2 | |||||||||||
Foreign exchange adjustment | - | - | - | - | - | - | |||||||||||||
Total Operating Expenses | 270.6 | 269.1 | (164.8 | ) | (170.0 | ) | 1,101.8 | 1,073.5 | |||||||||||
Income (Loss) from Operations before federal taxes | (21.8 | ) | (25.2 | ) | 315.9 | 228.0 | |||||||||||||
Federal income taxes | (7.2 | ) | (14.0 | ) | 94.1 | 55.5 | |||||||||||||
Income (Loss) from Operations | $ | (14.6 | ) | $ | (11.3 | ) | $ | 221.8 | $ | 172.5 | |||||||||
* See page 1 for a reconciliation of Income from Operations to consolidated Net Income |
3/31/2006 | PAGE 13 | |||||||||||||||
Five Year Comparative Balance Sheet | ||||||||||||||||
Unaudited [Millions of Dollars except Common Share Data] | ||||||||||||||||
As of December 31, | ||||||||||||||||
ASSETS | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||
Investments | ||||||||||||||||
Corporate bonds | $ | 23,105.1 | $ | 25,934.7 | $ | 25,868.5 | $ | 26,889.0 | $ | 25,860.7 | ||||||
U.S. government bonds | 410.5 | 513.6 | 225.8 | 163.0 | 161.8 | |||||||||||
Foreign government bonds | 1,174.7 | 1,110.2 | 1,194.6 | 1,285.9 | 1,203.3 | |||||||||||
Mortgage backed securities | 3,524.7 | 5,015.5 | 5,195.6 | 6,090.5 | 5,951.2 | |||||||||||
State and municipal bonds | 44.7 | 114.4 | 152.8 | 166.0 | 128.8 | |||||||||||
Preferred stocks-redeemable | 85.9 | 79.0 | 132.2 | 106.1 | 137.4 | |||||||||||
Common stocks | 319.3 | 228.0 | 98.4 | 69.8 | 55.9 | |||||||||||
Preferred stocks-equity | 151.2 | 109.2 | 100.7 | 91.3 | 88.8 | |||||||||||
Total AFS Securities | 28,816.1 | 33,104.7 | 32,968.6 | 34,861.7 | 33,587.9 | |||||||||||
Trading securities | - | - | 3,120.1 | 3,237.4 | 3,246.0 | |||||||||||
Mortgage loans | 4,535.5 | 4,205.5 | 4,195.0 | 3,856.9 | 3,662.6 | |||||||||||
Real estate | 267.9 | 279.7 | 112.9 | 191.4 | 182.7 | |||||||||||
Policy loans | 1,939.7 | 1,945.6 | 1,924.4 | 1,870.6 | 1,862.2 | |||||||||||
Other long-term investments | 553.8 | 464.4 | 456.7 | 489.3 | 626.9 | |||||||||||
Total Investments | 36,113.1 | 39,999.9 | 42,777.6 | 44,507.3 | 43,168.4 | |||||||||||
Invest in unconsol affiliates | 8.1 | - | - | - | - | |||||||||||
Cash and invested cash | 3,095.5 | 1,690.5 | 1,711.2 | 1,661.7 | 2,311.7 | |||||||||||
Premiums and fees receivable | 400.1 | 212.9 | 352.1 | 232.9 | 343.2 | |||||||||||
Accrued investment income | 563.5 | 536.7 | 522.7 | 525.1 | 526.4 | |||||||||||
Federal income taxes recoverable | 55.5 | 317.7 | 45.9 | - | - | |||||||||||
Amounts recoverable from reinsurers | 6,030.4 | 7,280.0 | 7,839.2 | 7,067.5 | 6,926.3 | |||||||||||
Deferred acquisition costs | 2,866.8 | 2,939.7 | 3,147.1 | 3,445.0 | 4,092.2 | |||||||||||
Value of business acquired | 1,362.5 | 1,250.1 | 1,196.5 | 1,095.2 | 998.9 | |||||||||||
Other intangible assets | 68.6 | 73.0 | 79.1 | 106.4 | 143.3 | |||||||||||
Goodwill | 1,211.8 | 1,233.2 | 1,234.7 | 1,195.9 | 1,194.2 | |||||||||||
Other | 1,432.4 | 1,472.5 | 1,273.5 | 1,177.7 | 1,336.1 | |||||||||||
Assets held in separate accounts | 44,833.4 | 36,178.3 | 46,565.2 | 55,204.6 | 63,746.8 | |||||||||||
Total Assets | $ | 98,041.6 | $ | 93,184.6 | $ | 106,744.9 | $ | 116,219.3 | $ | 124,787.6 | ||||||
LIABILITIES and SHAREHOLDERS' EQUITY | ||||||||||||||||
Liabilities | ||||||||||||||||
Insurance and Investment Contract Liabilities: | ||||||||||||||||
Reserves | $ | 20,454.9 | $ | 22,639.3 | $ | 23,549.8 | $ | 23,242.1 | $ | 23,609.2 | ||||||
Unpaid claims | 1,087.5 | 778.4 | 1,058.4 | 1,080.3 | 1,040.8 | |||||||||||
Unearned premiums | 66.9 | 141.2 | 104.5 | 5.8 | 2.1 | |||||||||||
Premium deposit funds | 18,585.0 | 20,518.8 | 21,769.3 | 22,215.1 | 21,713.3 | |||||||||||
Participating policyholders' funds | 100.2 | 156.7 | 155.1 | 145.3 | 111.2 | |||||||||||
Other policyholders' funds | 562.7 | 610.9 | 680.9 | 714.0 | 746.1 | |||||||||||
Total Ins and Inv Contr Liabilities | 40,857.2 | 44,845.3 | 47,318.1 | 47,402.5 | 47,222.8 | |||||||||||
Federal income tax liabilities | - | - | - | 77.6 | 19.8 | |||||||||||
Short-term debt | 350.2 | 153.0 | 44.0 | 214.4 | 119.9 | |||||||||||
Long-term debt | 861.8 | 1,119.2 | 1,117.5 | 1,048.6 | 999.0 | |||||||||||
Junior subordinated debentures issued to affiliated trusts | 474.7 | 392.7 | 341.3 | 339.8 | 334.0 | |||||||||||
Embedded derivative - modco | - | - | 352.3 | 375.3 | 292.2 | |||||||||||
Other liabilities | 4,216.1 | 4,171.5 | 4,270.1 | 4,467.8 | 4,832.8 | |||||||||||
Deferred gain on indemnity reinsurance | 1,144.5 | 977.1 | 924.8 | 913.0 | 836.0 | |||||||||||
Liability related to separate accounts | 44,833.4 | 36,178.3 | 46,565.2 | 55,204.6 | 63,746.8 | |||||||||||
Total Liabilities | 92,737.8 | 87,837.2 | 100,933.2 | 110,043.7 | 118,403.2 | |||||||||||
Unrealized gains | 217.2 | 781.6 | 815.1 | 836.9 | 503.9 | |||||||||||
Foreign currency | (8.0 | ) | 50.8 | 109.0 | 154.3 | 83.4 | ||||||||||
Minimum pension liability adjustment | (36.0 | ) | (97.8 | ) | (55.1 | ) | (60.5 | ) | (59.5 | ) | ||||||
Shareholders' equity- other | 5,130.6 | 4,612.9 | 4,942.6 | 5,244.9 | 5,856.6 | |||||||||||
Total Shareholders' Equity | 5,303.8 | 5,347.5 | 5,811.6 | 6,175.6 | 6,384.4 | |||||||||||
Total Liabilities | ||||||||||||||||
and Shareholders' Equity | $ | 98,041.6 | $ | 93,184.6 | $ | 106,744.9 | $ | 116,219.3 | $ | 124,787.6 | ||||||
Shareholders' Equity Per Share | ||||||||||||||||
Book Value, Excluding AOCI | $ | 27.39 | $ | 25.97 | $ | 27.69 | $ | 30.17 | $ | 33.66 | ||||||
Common shares outstanding (in millions) | 187.3 | 177.6 | 178.5 | 173.8 | 174.0 |
3/31/2006 | PAGE 14 | |||||||||||||||||||||||||||
Quarterly Balance Sheet | ||||||||||||||||||||||||||||
Unaudited [Millions of Dollars, except Common Share Data] | ||||||||||||||||||||||||||||
Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | ||||||||||||||||||||
2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||||
Corporate bonds | $ | 26,209.2 | $ | 25,638.1 | $ | 26,750.0 | $ | 26,889.0 | $ | 26,305.9 | $ | 26,757.7 | $ | 26,453.6 | $ | 25,860.7 | $ | 25,418.0 | ||||||||||
U.S. government bonds | 234.2 | 156.3 | 162.9 | 163.0 | 165.7 | 174.4 | 158.3 | 161.8 | 173.4 | |||||||||||||||||||
Foreign government bonds | 1,321.0 | 1,223.8 | 1,233.8 | 1,285.9 | 1,296.7 | 1,248.0 | 1,195.0 | 1,203.3 | 1,169.7 | |||||||||||||||||||
Mortgage backed securities | 5,617.0 | 5,524.1 | 5,793.4 | 6,090.5 | 6,193.8 | 6,503.0 | 6,237.1 | 5,951.2 | 5,868.8 | |||||||||||||||||||
State and municipal bonds | 164.1 | 164.8 | 168.8 | 166.0 | 156.3 | 160.8 | 157.9 | 128.8 | 126.0 | |||||||||||||||||||
Preferred stocks - redeemable | 120.9 | 100.7 | 113.9 | 106.1 | 106.5 | 131.2 | 123.0 | 137.4 | 136.9 | |||||||||||||||||||
Common stocks | 97.4 | 92.3 | 86.5 | 69.8 | 65.2 | 64.2 | 62.2 | 55.9 | 61.0 | |||||||||||||||||||
Preferred stocks-equity | 100.2 | 90.5 | 91.6 | 91.3 | 89.6 | 90.3 | 89.4 | 88.8 | 115.0 | |||||||||||||||||||
Total AFS Securities | 33,864.1 | 32,990.5 | 34,400.8 | 34,861.7 | 34,379.6 | 35,129.6 | 34,476.5 | 33,587.9 | 33,068.8 | |||||||||||||||||||
Trading securities | 3,191.3 | 3,087.9 | 3,223.6 | 3,237.4 | 3,206.5 | 3,345.1 | 3,287.0 | 3,246.0 | 3,190.1 | |||||||||||||||||||
Mortgage loans | 3,988.5 | 3,865.4 | 3,831.3 | 3,856.9 | 3,805.7 | 3,750.6 | 3,696.2 | 3,662.6 | 3,586.2 | |||||||||||||||||||
Real estate | 104.8 | 104.3 | 135.1 | 191.4 | 213.4 | 209.8 | 196.6 | 182.7 | 180.4 | |||||||||||||||||||
Policy loans | 1,876.7 | 1,871.3 | 1,871.9 | 1,870.6 | 1,860.5 | 1,866.9 | 1,856.4 | 1,862.2 | 1,860.4 | |||||||||||||||||||
Other long-term investments | 476.3 | 442.9 | 463.8 | 489.3 | 516.5 | 561.3 | 572.3 | 626.9 | 687.5 | |||||||||||||||||||
Total Investments | 43,501.7 | 42,362.5 | 43,926.6 | 44,507.3 | 43,982.2 | 44,863.3 | 44,085.0 | 43,168.4 | 42,573.2 | |||||||||||||||||||
Cash and invested cash | 2,255.5 | 2,213.7 | 1,996.0 | 1,661.7 | 1,499.1 | 1,658.9 | 1,601.9 | 2,311.7 | 1,974.0 | |||||||||||||||||||
Premiums and fees receivable | 337.5 | 265.2 | 248.8 | 232.9 | 299.3 | 222.8 | 332.6 | 343.2 | 363.2 | |||||||||||||||||||
Accrued investment income | 547.9 | 543.7 | 573.2 | 525.1 | 557.6 | 537.5 | 565.2 | 526.4 | 532.1 | |||||||||||||||||||
Federal income taxes recoverable | - | 204.0 | - | - | 5.0 | - | - | - | 67.2 | |||||||||||||||||||
Amount recoverable from reinsurers | 7,865.7 | 7,138.7 | 7,031.9 | 7,067.5 | 7,336.5 | 7,241.6 | 7,211.0 | 6,926.3 | 6,899.4 | |||||||||||||||||||
Deferred acquisition costs | 2,999.0 | 3,521.4 | 3,326.8 | 3,445.0 | 3,712.7 | 3,554.5 | 3,904.0 | 4,092.2 | 4,371.2 | |||||||||||||||||||
Value of business acquired | 1,180.0 | 1,155.8 | 1,103.9 | 1,095.2 | 1,073.1 | 1,041.7 | 1,019.4 | 998.9 | 984.4 | |||||||||||||||||||
Other intangible assets | 85.8 | 93.6 | 98.7 | 106.4 | 113.8 | 124.4 | 134.0 | 143.3 | 151.8 | |||||||||||||||||||
Goodwill | 1,235.2 | 1,235.0 | 1,195.0 | 1,195.9 | 1,195.7 | 1,194.8 | 1,194.6 | 1,194.2 | 1,194.4 | |||||||||||||||||||
Other | 1,303.7 | 1,240.5 | 1,218.4 | 1,177.7 | 1,190.0 | 1,273.9 | 1,245.5 | 1,336.1 | 1,298.7 | |||||||||||||||||||
Assets held in separate accounts | 48,557.9 | 49,343.7 | 49,657.9 | 55,204.6 | 55,387.2 | 57,240.0 | 60,811.5 | 63,746.8 | 67,984.2 | |||||||||||||||||||
Total Assets | $ | 109,869.9 | $ | 109,317.9 | $ | 110,377.1 | $ | 116,219.3 | $ | 116,352.2 | $ | 118,953.4 | $ | 122,104.6 | $ | 124,787.6 | $ | 128,393.9 | ||||||||||
LIABILITIES and SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||
Insurance and Inv Contract Liabilities: | ||||||||||||||||||||||||||||
Reserves | $ | 23,704.6 | $ | 23,165.1 | $ | 23,010.1 | $ | 23,242.1 | $ | 23,498.2 | $ | 23,555.6 | $ | 23,690.2 | $ | 23,609.2 | $ | 23,734.5 | ||||||||||
Unpaid claims | 1,076.8 | 1,083.5 | 1,067.0 | 1,080.3 | 1,164.9 | 1,114.2 | 1,037.7 | 1,040.8 | 979.0 | |||||||||||||||||||
Unearned premiums | 104.3 | 9.3 | 7.5 | 5.8 | 3.1 | 1.9 | 1.2 | 2.1 | 2.3 | |||||||||||||||||||
Premium deposit funds | 21,827.4 | 22,017.0 | 22,218.9 | 22,215.1 | 22,026.0 | 22,075.8 | 21,932.7 | 21,713.3 | 21,448.6 | |||||||||||||||||||
Participating policyholders' funds | 171.1 | 165.9 | 165.2 | 145.3 | 128.1 | 146.3 | 123.3 | 111.2 | 89.5 | |||||||||||||||||||
Other policyholders' funds | 688.1 | 698.5 | 703.4 | 714.0 | 716.1 | 717.6 | 740.2 | 746.1 | 746.6 | |||||||||||||||||||
Total Ins and Inv Contr Liabilities | 47,572.3 | 47,139.3 | 47,172.2 | 47,402.5 | 47,536.4 | 47,611.5 | 47,525.3 | 47,222.8 | 47,000.5 | |||||||||||||||||||
Federal income taxes | 108.1 | - | 83.8 | 77.6 | - | 160.8 | 31.5 | 19.8 | - | |||||||||||||||||||
Short-term debt | 38.0 | 30.0 | 0.0 | 214.4 | 194.0 | 222.5 | 165.1 | 119.9 | 10.6 | |||||||||||||||||||
Long-term debt | 1,317.7 | 1,313.7 | 1,315.4 | 1,048.6 | 1,046.6 | 1,000.6 | 999.5 | 999.0 | 998.5 | |||||||||||||||||||
Junior subordinated debentures issued to | ||||||||||||||||||||||||||||
affiliated trusts | 344.7 | 337.6 | 341.1 | 339.8 | 336.6 | 338.7 | 335.9 | 334.0 | 332.3 | |||||||||||||||||||
Embedded derivative - modco | 440.6 | 252.6 | 365.5 | 375.3 | 313.5 | 420.3 | 314.1 | 292.2 | 192.0 | |||||||||||||||||||
Other liabilities | 4,440.4 | 4,493.6 | 4,537.9 | 4,467.8 | 4,601.3 | 4,721.1 | 4,782.1 | 4,832.8 | 4,720.7 | |||||||||||||||||||
Deferred gain on indemnity reinsurance | 906.6 | 888.4 | 932.4 | 913.0 | 893.7 | 874.5 | 855.2 | 836.0 | 816.9 | |||||||||||||||||||
Liab related to separate accounts | 48,557.9 | 49,343.7 | 49,657.9 | 55,204.6 | 55,387.2 | 57,240.0 | 60,811.5 | 63,746.8 | 67,984.2 | |||||||||||||||||||
Total Liabilities | 103,726.4 | 103,799.0 | 104,406.3 | 110,043.7 | 110,309.3 | 112,590.0 | 115,820.2 | 118,403.2 | 122,055.7 | |||||||||||||||||||
Unrealized gains on investments | 1,038.0 | 412.0 | 780.1 | 822.9 | 582.9 | 851.2 | 569.0 | 496.6 | 220.2 | |||||||||||||||||||
Gains - derivatives | 29.0 | 18.5 | 19.8 | 14.0 | 7.7 | 11.9 | 8.9 | 7.3 | 35.2 | |||||||||||||||||||
Foreign currency | 128.9 | 120.8 | 116.9 | 154.3 | 146.5 | 109.4 | 99.6 | 83.4 | 89.7 | |||||||||||||||||||
Minimum pension liability | (56.6 | ) | (56.0 | ) | (55.8 | ) | (60.5 | ) | (60.0 | ) | (57.3 | ) | (56.6 | ) | (59.5 | ) | (60.1 | ) | ||||||||||
Shareholders' equity- other | 5,004.2 | 5,023.6 | 5,109.8 | 5,244.9 | 5,365.8 | 5,448.3 | 5,663.5 | 5,856.6 | 6,053.2 | |||||||||||||||||||
Total Shareholders' Equity | 6,143.5 | 5,518.9 | 5,970.8 | 6,175.6 | 6,042.9 | 6,363.5 | 6,284.4 | 6,384.4 | 6,338.2 | |||||||||||||||||||
Total Liabilities | ||||||||||||||||||||||||||||
and Shareholders' Equity | $ | 109,869.9 | $ | 109,317.9 | $ | 110,377.1 | $ | 116,219.3 | $ | 116,352.2 | $ | 118,953.4 | $ | 122,104.6 | $ | 124,787.6 | $ | 128,393.9 | ||||||||||
Shareholders' Equity Per Share | ||||||||||||||||||||||||||||
Book Value, Excluding AOCI | $ | 27.99 | $ | 28.51 | $ | 29.23 | $ | 30.17 | $ | 30.85 | $ | 31.56 | $ | 32.65 | $ | 33.66 | $ | 34.37 | ||||||||||
Common shares outstanding (in millions) | 178.8 | 176.2 | 174.8 | 173.8 | 173.9 | 172.6 | 173.5 | 174.0 | 176.1 |
3/31/2006 | PAGE 15 | ||||||||||||||||||||||||
Consolidating Balance Sheets | |||||||||||||||||||||||||
Unaudited [Millions of Dollars] | |||||||||||||||||||||||||
Investment | |||||||||||||||||||||||||
Lincoln Retirement | Life Insurance | Management | Lincoln UK | ||||||||||||||||||||||
ASSETS | Mar | Dec | Mar | Dec | Mar | Dec | Mar | Dec | |||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | ||||||||||||||||||
Investments | |||||||||||||||||||||||||
Corporate bonds | $ | 12,348.1 | $ | 12,688.1 | $ | 8,787.8 | $ | 9,038.9 | $ | 527.2 | $ | 515.9 | $ | 629.3 | $ | 646.7 | |||||||||
U.S. government bonds | 11.1 | 11.3 | 87.3 | 71.0 | - | - | - | - | |||||||||||||||||
Foreign government bonds | 266.9 | 275.9 | 173.1 | 176.6 | 6.6 | 6.8 | 325.7 | 302.2 | |||||||||||||||||
Asset/mortgage backed securities | 3,225.2 | 3,277.3 | 1,856.9 | 1,901.1 | 97.1 | 91.9 | - | - | |||||||||||||||||
State and municipal bonds | 65.6 | 67.2 | 41.7 | 42.7 | 1.1 | 1.1 | - | - | |||||||||||||||||
Preferred stocks-redeemable | 63.2 | 61.2 | 27.3 | 28.4 | - | - | - | - | |||||||||||||||||
Common stocks | 2.8 | - | 0.5 | 0.0 | - | - | 43.4 | 43.0 | |||||||||||||||||
Preferred stocks-equity | 41.7 | 42.2 | 14.3 | 14.2 | 2.6 | 2.7 | - | - | |||||||||||||||||
Total AFS Securities | 16,024.7 | 16,423.1 | 10,989.0 | 11,273.0 | 634.6 | 618.4 | 998.4 | 991.9 | |||||||||||||||||
Trading Securities | 1,098.8 | 1,130.6 | - | - | - | - | - | - | |||||||||||||||||
Mortgage loans | 1,649.1 | 1,720.6 | 1,613.5 | 1,621.4 | 42.1 | 44.1 | 0.0 | 0.0 | |||||||||||||||||
Real estate | - | - | - | - | - | - | 0.2 | 0.2 | |||||||||||||||||
Policy loans | 428.5 | 431.7 | 1,427.9 | 1,426.0 | - | - | 4.0 | 4.4 | |||||||||||||||||
Allocated investments | 3,687.7 | 3,645.9 | 1,687.2 | 1,545.0 | 165.5 | 159.5 | - | - | |||||||||||||||||
Other long-term investments | 153.1 | 155.0 | 2.8 | 3.3 | - | - | - | - | |||||||||||||||||
Total Investments | 23,041.9 | 23,507.0 | 15,720.4 | 15,868.8 | 842.3 | 822.1 | 1,002.6 | 996.6 | |||||||||||||||||
Notes receivable from LNC | 361.2 | 423.3 | 96.2 | 56.8 | 11.1 | 76.3 | - | - | |||||||||||||||||
Cash and invested cash | (93.6 | ) | (113.3 | ) | (2.2 | ) | (40.7 | ) | 68.9 | 95.3 | 230.1 | 245.5 | |||||||||||||
Premium and fees receivable | (0.2 | ) | (0.0 | ) | 15.4 | 32.3 | 64.3 | 56.7 | - | - | |||||||||||||||
Accrued investment income | 235.6 | 236.5 | 194.2 | 179.2 | 9.2 | 8.2 | 23.0 | 20.2 | |||||||||||||||||
Amount recoverable from reinsurers | 910.2 | 937.2 | 1,299.3 | 1,273.0 | - | - | 62.2 | 59.9 | |||||||||||||||||
Deferred acquisition costs | 1,614.2 | 1,480.5 | 2,102.4 | 1,970.0 | 166.5 | 154.5 | 487.9 | 486.3 | |||||||||||||||||
Value of business acquired | 73.3 | 76.0 | 651.9 | 665.8 | - | - | 259.3 | 257.2 | |||||||||||||||||
Other intangible assets | 139.9 | 129.4 | - | - | 11.9 | 13.9 | - | - | |||||||||||||||||
Goodwill | 64.1 | 64.1 | 855.1 | 855.1 | 260.8 | 260.8 | 14.4 | 14.3 | |||||||||||||||||
Other | 133.6 | 183.0 | 480.8 | 507.9 | 144.9 | 127.3 | 132.0 | 113.9 | |||||||||||||||||
Assets held in separate accounts | 51,440.1 | 48,182.0 | 2,643.0 | 2,482.7 | 6,147.6 | 5,762.5 | 7,753.5 | 7,319.6 | |||||||||||||||||
Total Assets | $ | 77,920.5 | $ | 75,105.6 | $ | 24,056.5 | $ | 23,850.9 | $ | 7,727.4 | $ | 7,377.6 | $ | 9,965.0 | $ | 9,513.3 | |||||||||
Corporate and | Consolidating | ||||||||||||||||||||||||
Other Operations | Adjustments | Consolidated | |||||||||||||||||||||||
ASSETS | Mar | Dec | Mar | Dec | Mar | Dec | |||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | ||||||||||||||||||||
Investments | |||||||||||||||||||||||||
Corporate bonds | $ | 3,125.6 | $ | 2,971.1 | $ | - | $ | - | $ | 25,418.0 | $ | 25,860.7 | |||||||||||||
U.S. government bonds | 74.9 | 79.5 | - | - | 173.4 | 161.8 | |||||||||||||||||||
Foreign government bonds | 397.3 | 441.8 | - | - | 1,169.7 | 1,203.3 | |||||||||||||||||||
Asset/mortgage backed securities | 689.6 | 680.9 | - | - | 5,868.8 | 5,951.2 | |||||||||||||||||||
State and municipal bonds | 17.4 | 17.7 | - | - | 126.0 | 128.8 | |||||||||||||||||||
Preferred stocks-redeemable | 46.4 | 47.9 | - | - | 136.9 | 137.4 | |||||||||||||||||||
Common stocks | 14.2 | 13.0 | - | - | 61.0 | 55.9 | |||||||||||||||||||
Preferred stocks-equity | 56.5 | 29.6 | - | - | 115.0 | 88.8 | |||||||||||||||||||
Total AFS Securities | 4,421.9 | 4,281.4 | - | - | 33,068.8 | 33,587.9 | |||||||||||||||||||
Trading securities | 2,091.3 | 2,115.4 | - | - | 3,190.1 | 3,246.0 | |||||||||||||||||||
Mortgage loans | 281.4 | 276.5 | - | - | 3,586.2 | 3,662.6 | |||||||||||||||||||
Real estate | 180.2 | 182.5 | - | - | 180.4 | 182.7 | |||||||||||||||||||
Policy loans | - | 0.0 | - | - | 1,860.4 | 1,862.2 | |||||||||||||||||||
Allocated investments | (5,540.5 | ) | (5,350.5 | ) | - | - | - | - | |||||||||||||||||
Other long-term investments | 531.6 | 468.6 | - | - | 687.5 | 626.9 | |||||||||||||||||||
Total Investments | 1,965.9 | 1,974.0 | (0.0 | ) | (0.0 | ) | 42,573.2 | 43,168.4 | |||||||||||||||||
Investments In Consolidated Subs | 6,246.2 | 6,077.7 | (6,246.2 | ) | (6,077.7 | ) | - | - | |||||||||||||||||
Notes receivable from LNC | (408.9 | ) | (521.6 | ) | (59.6 | ) | (34.8 | ) | - | - | |||||||||||||||
Cash and invested cash | 1,770.8 | 2,124.9 | - | - | 1,974.0 | 2,311.7 | |||||||||||||||||||
Premium and fees receivable | 283.7 | 254.3 | - | - | 363.2 | 343.2 | |||||||||||||||||||
Accrued investment income | 70.1 | 82.2 | - | - | 532.1 | 526.4 | |||||||||||||||||||
Federal income tax recoverable | - | - | 67.2 | - | 67.2 | - | |||||||||||||||||||
Amount recoverable from reinsurers | 4,627.7 | 4,656.2 | - | - | 6,899.4 | 6,926.3 | |||||||||||||||||||
Deferred acquisition costs | 0.2 | 1.0 | - | - | 4,371.2 | 4,092.2 | |||||||||||||||||||
Value of business acquired | - | - | - | - | 984.4 | 998.9 | |||||||||||||||||||
Other intangible assets | - | - | - | - | 151.8 | 143.3 | |||||||||||||||||||
Goodwill | - | - | - | - | 1,194.4 | 1,194.2 | |||||||||||||||||||
Other | 418.7 | 414.8 | (11.2 | ) | (10.9 | ) | 1,298.7 | 1,336.1 | |||||||||||||||||
Assets held in separate accounts | - | - | - | - | 67,984.2 | 63,746.8 | |||||||||||||||||||
Total Assets | $ | 14,974.3 | $ | 15,063.7 | $ | (6,249.9 | ) | $ | (6,123.5 | ) | $ | 128,393.9 | $ | 124,787.6 |
3/31/2006 | PAGE 16 | ||||||||||||||||||||||||
Consolidating Balance Sheets | |||||||||||||||||||||||||
Unaudited [Millions of Dollars] | |||||||||||||||||||||||||
Investment | |||||||||||||||||||||||||
Lincoln Retirement | Life Insurance | Management | Lincoln UK | ||||||||||||||||||||||
LIABILITIES and SHAREHOLDERS' EQUITY | Mar | Dec | Mar | Dec | Mar | Dec | Mar | Dec | |||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | 2006 | 2005 | ||||||||||||||||||
Liabilities | |||||||||||||||||||||||||
Insurance and Inv Contract Liabilities: | |||||||||||||||||||||||||
Reserves | $ | 2,203.3 | $ | 2,251.7 | $ | 16,285.2 | $ | 16,149.7 | $ | - | $ | - | $ | 1,329.4 | $ | 1,332.0 | |||||||||
Unpaid claims | 26.5 | 29.0 | 134.5 | 129.5 | - | - | 45.4 | 44.8 | |||||||||||||||||
Unearned premiums | - | - | - | - | - | - | - | - | |||||||||||||||||
Premium deposit funds | 20,553.3 | 20,816.8 | 19.0 | 17.3 | 740.1 | 739.9 | 30.5 | 31.9 | |||||||||||||||||
Participating policyholders' funds | - | - | 89.5 | 111.2 | - | - | - | - | |||||||||||||||||
Other policyholders' funds | - | - | 741.6 | 741.1 | - | - | - | - | |||||||||||||||||
Total Insurance and Inv Contract Liabilities | 22,783.1 | 23,097.6 | 17,269.7 | 17,148.9 | 740.1 | 739.9 | 1,405.3 | 1,408.6 | |||||||||||||||||
Federal income taxes | 294.3 | 284.3 | 94.5 | 92.9 | 17.6 | 11.8 | 89.2 | 86.9 | |||||||||||||||||
Notes payable to LNC | 24.9 | 0.8 | - | - | - | - | - | - | |||||||||||||||||
Embedded derivative - modco | 19.6 | 40.5 | 0.8 | 2.8 | - | - | - | - | |||||||||||||||||
Other liabilities | 183.1 | 154.2 | 433.7 | 498.8 | 286.5 | 308.3 | 237.7 | 209.8 | |||||||||||||||||
Deferred gain on indemnity reinsurance | - | - | - | - | - | - | - | - | |||||||||||||||||
Liability related to separate accounts | 51,440.1 | 48,182.0 | 2,643.0 | 2,482.7 | 6,147.6 | 5,762.5 | 7,753.5 | 7,319.6 | |||||||||||||||||
Total Liabilities | 74,745.2 | 71,759.4 | 20,441.6 | 20,226.0 | 7,191.8 | 6,822.5 | 9,485.7 | 9,025.0 | |||||||||||||||||
Net unrealized gains (losses) on securities | 131.2 | 274.3 | 51.4 | 140.6 | 0.5 | 2.1 | 37.8 | 45.2 | |||||||||||||||||
Net gains (losses) on derivatives | (0.8 | ) | 1.2 | 5.6 | 5.9 | - | - | - | - | ||||||||||||||||
Foreign currency translation adjustment | - | - | - | - | - | - | 72.0 | 65.8 | |||||||||||||||||
Minimum pension liability adjustment | - | - | - | (0.1 | ) | 0.5 | 0.5 | (53.8 | ) | (53.3 | ) | ||||||||||||||
Other shareholders' equity | 3,044.9 | 3,070.7 | 3,557.9 | 3,478.4 | 534.7 | 552.4 | 423.3 | 430.6 | |||||||||||||||||
Shareholders' Equity | 3,175.3 | 3,346.2 | 3,614.8 | 3,624.9 | 535.7 | 555.1 | 479.3 | 488.3 | |||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 77,920.5 | $ | 75,105.6 | $ | 24,056.5 | $ | 23,850.9 | $ | 7,727.4 | $ | 7,377.6 | $ | 9,965.0 | $ | 9,513.3 | |||||||||
Corporate and | Consolidating | ||||||||||||||||||||||||
Other Operations | Adjustments | Consolidated | |||||||||||||||||||||||
�� | |||||||||||||||||||||||||
LIABILITIES and SHAREHOLDERS' EQUITY | Mar | Dec | Mar | Dec | Mar | Dec | |||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2006 | 2005 | ||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||
Insurance and Inv Contract Liabilities: | |||||||||||||||||||||||||
Reserves | $ | 3,916.6 | $ | 3,875.9 | $ | - | $ | - | $ | 23,734.5 | $ | 23,609.2 | |||||||||||||
Unpaid claims | 772.7 | 837.5 | - | - | 979.0 | 1,040.8 | |||||||||||||||||||
Unearned premiums | 2.3 | 2.1 | - | - | 2.3 | 2.1 | |||||||||||||||||||
Premium deposit funds | 105.7 | 107.4 | - | - | 21,448.6 | 21,713.3 | |||||||||||||||||||
Participating policyholders' funds | - | - | - | - | 89.5 | 111.2 | |||||||||||||||||||
Other policyholders' funds | 5.0 | 5.0 | - | - | 746.6 | 746.1 | |||||||||||||||||||
Total Insurance and Inv Contract Liabilities | 4,802.3 | 4,827.8 | - | - | 47,000.5 | 47,222.8 | |||||||||||||||||||
Federal income taxes | (562.7 | ) | (456.2 | ) | 67.1 | - | - | �� | 19.8 | ||||||||||||||||
Short-term debt | 10.6 | 119.9 | - | - | 10.6 | 119.9 | |||||||||||||||||||
Long-term debt | 998.5 | 999.0 | - | - | 998.5 | 999.0 | |||||||||||||||||||
Junior subordinated debentures issued to affiliated trusts | 332.3 | 334.0 | - | - | 332.3 | 334.0 | |||||||||||||||||||
Notes payable to LNC | 34.7 | 33.9 | (59.6 | ) | (34.8 | ) | - | - | |||||||||||||||||
Embedded derivative - modco | 171.7 | 248.9 | - | - | 192.0 | 292.2 | |||||||||||||||||||
Other liabilities | 3,590.9 | 3,672.6 | (11.2 | ) | (10.9 | ) | 4,720.7 | 4,832.8 | |||||||||||||||||
Deferred gain on indemnity reinsurance | 816.9 | 836.0 | - | - | 816.9 | 836.0 | |||||||||||||||||||
Liability related to separate accounts | - | - | - | - | 67,984.2 | 63,746.8 | |||||||||||||||||||
Total Liabilities | 10,195.2 | 10,615.9 | (3.8 | ) | (45.7 | ) | 122,055.7 | 118,403.2 | |||||||||||||||||
Net unrealized gains (losses) on securities | 1.1 | 35.8 | (1.8 | ) | (1.4 | ) | 220.2 | 496.6 | |||||||||||||||||
Gains (losses) on derivatives | 30.3 | 0.2 | - | - | 35.2 | 7.3 | |||||||||||||||||||
Foreign currency translation adjustment | 10.1 | 10.1 | 7.5 | 7.5 | 89.7 | 83.4 | |||||||||||||||||||
Minimum pension liability adjustment | (6.7 | ) | (6.7 | ) | - | - | (60.1 | ) | (59.5 | ) | |||||||||||||||
Other shareholders' equity | 4,744.2 | 4,408.3 | (6,251.8 | ) | (6,083.9 | ) | 6,053.2 | 5,856.6 | |||||||||||||||||
Shareholders' Equity | 4,779.1 | 4,447.8 | (6,246.0 | ) | (6,077.8 | ) | 6,338.2 | 6,384.4 | |||||||||||||||||
Total Liabilities and Shareholders' Equity | $ | 14,974.3 | $ | 15,063.7 | $ | (6,249.9 | ) | $ | (6,123.5 | ) | $ | 128,393.9 | $ | 124,787.6 |
3/31/2006 | PAGE 17 | |||||||||||||||
Lincoln Retirement | ||||||||||||||||
Income Statements & Operational Data | ||||||||||||||||
Unaudited [Millions of Dollars] | ||||||||||||||||
For the Year Ended December 31 | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||
Operating Revenue | ||||||||||||||||
Premiums | $ | 77.5 | $ | 47.4 | $ | 21.9 | $ | 33.0 | $ | 45.7 | ||||||
Surrender charges | 31.2 | 31.2 | 28.9 | 25.0 | 27.4 | |||||||||||
Expense assessments | 508.6 | 446.2 | 441.9 | 580.5 | 727.1 | |||||||||||
Other revenue and fees | 16.7 | 3.3 | 8.7 | (6.3 | ) | (6.2 | ) | |||||||||
Net investment income | 1,399.1 | 1,457.5 | 1,483.7 | 1,495.9 | 1,463.9 | |||||||||||
Total Operating Revenue | 2,033.1 | 1,985.5 | 1,985.1 | 2,128.0 | 2,258.0 | |||||||||||
Operating Expenses | ||||||||||||||||
Benefits paid or provided: | ||||||||||||||||
Benefits | 263.9 | 314.1 | 181.5 | 189.9 | 223.0 | |||||||||||
Interest credited to policy bal. | 863.8 | 903.8 | 867.7 | 836.0 | 819.0 | |||||||||||
Def. sales inducements net of amortization | (12.1 | ) | (12.6 | ) | (14.1 | ) | (40.6 | ) | (43.9 | ) | ||||||
Total insurance benefits | 1,115.7 | 1,205.3 | 1,035.1 | 985.2 | 998.1 | |||||||||||
Underwriting, acquisition, | ||||||||||||||||
insurance and other expenses: | ||||||||||||||||
Commissions and other volume-related expenses | 386.0 | 385.4 | 386.0 | 586.7 | 626.3 | |||||||||||
Operating and administrative expenses | 231.8 | 231.3 | 226.2 | 231.8 | 259.2 | |||||||||||
Taxes, licenses and fees | 13.7 | 11.5 | 17.7 | 14.6 | 10.5 | |||||||||||
Subtotal | 631.6 | 628.2 | 630.0 | 833.1 | 895.9 | |||||||||||
DAC deferral net of amortization | (103.4 | ) | (73.6 | ) | (103.0 | ) | (247.9 | ) | (275.8 | ) | ||||||
VOBA amortization | 14.7 | 31.8 | 9.5 | 20.0 | 16.6 | |||||||||||
Total underwriting, acquisition, | ||||||||||||||||
insurance and other expenses | 542.9 | 586.3 | 536.5 | 605.2 | 636.7 | |||||||||||
Goodwill amortization | 1.2 | - | - | - | - | |||||||||||
Total Operating Expenses | 1,659.8 | 1,791.7 | 1,571.6 | 1,590.5 | 1,634.8 | |||||||||||
Operating income before federal taxes | 373.3 | 193.9 | 413.5 | 537.6 | 623.2 | |||||||||||
Federal income taxes | 57.1 | 10.5 | 81.6 | 123.0 | 151.7 | |||||||||||
Income from Operations | $ | 316.2 | $ | 183.4 | $ | 331.9 | $ | 414.6 | $ | 471.5 | ||||||
Effective tax rate | 15.3 | % | 5.4 | % | 19.7 | % | 22.9 | % | 24.3 | % | ||||||
Average capital | $ | 1,831.4 | $ | 2,339.6 | $ | 2,400.3 | $ | 2,589.1 | $ | 2,797.1 | ||||||
Return on average capital | 17.3 | % | 7.8 | % | 13.8 | % | 16.0 | % | 16.9 | % | ||||||
Roll Forward of Deferred Acquisition Costs | ||||||||||||||||
Balance at beginning of period | $ | 812.5 | $ | 894.3 | $ | 824.7 | $ | 854.6 | $ | 1,040.4 | ||||||
Deferral | 227.8 | 229.0 | 223.4 | 421.9 | 455.3 | |||||||||||
Amortization | (124.4 | ) | (155.4 | ) | (120.4 | ) | (174.0 | ) | (179.5 | ) | ||||||
Included in Total Benefits and Expenses | 103.4 | 73.6 | 103.0 | 247.9 | 275.8 | |||||||||||
Adjustment related to realized (gains) losses | ||||||||||||||||
on available-for-sale securities | 68.2 | 73.0 | (18.7 | ) | (28.3 | ) | (33.5 | ) | ||||||||
Adjustment related to unrealized (gains) losses | ||||||||||||||||
on available-for-sale securities | (90.0 | ) | (201.3 | ) | (54.3 | ) | 8.3 | 197.7 | ||||||||
Other* | 0.2 | (14.8 | ) | - | ||||||||||||
Cumulative effect of accounting change | - | - | - | (42.3 | ) | - | ||||||||||
Balance at end of period | $ | 894.3 | $ | 824.7 | $ | 854.6 | $ | 1,040.4 | $ | 1,480.5 | ||||||
Roll Forward of Value of Business Acquired | ||||||||||||||||
Balance at beginning of period | $ | 169.2 | $ | 154.5 | $ | 122.7 | $ | 113.2 | $ | 92.6 | ||||||
Amortization | (14.7 | ) | (31.8 | ) | (9.5 | ) | (20.0 | ) | (16.6 | ) | ||||||
Cumulative effect of accounting change | - | - | - | (0.6 | ) | - | ||||||||||
Balance at end of period | $ | 154.5 | $ | 122.7 | $ | 113.2 | $ | 92.6 | $ | 76.0 | ||||||
*Includes the transfer of the Legacy Life block of business to the Life Insurance segment in the first quarter of 2002. |
3/31/2006 | PAGE 18 | |||||||||||||||||||||||||||
Lincoln Retirement | ||||||||||||||||||||||||||||
Income Statements & Operational Data | ||||||||||||||||||||||||||||
Unaudited [Millions of Dollars] | ||||||||||||||||||||||||||||
For the Quarter Ended | Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | |||||||||||||||||||
2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | ||||||||||||||||||||
Operating Revenue | ||||||||||||||||||||||||||||
Premiums | $ | 6.5 | $ | 7.4 | $ | 9.2 | $ | 9.9 | $ | 10.5 | $ | 7.8 | $ | 18.1 | $ | 9.2 | $ | 10.3 | ||||||||||
Surrender charges | 5.9 | 6.0 | 6.7 | 6.4 | 7.4 | 6.9 | 7.3 | 5.9 | 7.6 | |||||||||||||||||||
Expense assessments | 137.3 | 140.9 | 145.2 | 157.1 | 164.6 | 173.1 | 189.8 | 199.6 | 212.3 | |||||||||||||||||||
Other revenue and fees | (0.8 | ) | (2.1 | ) | (1.3 | ) | (2.0 | ) | (1.4 | ) | (1.6 | ) | (1.2 | ) | (1.9 | ) | (2.5 | ) | ||||||||||
Net investment income | 379.0 | 382.3 | 366.5 | 368.0 | 357.4 | 386.8 | 359.1 | 360.6 | 358.9 | |||||||||||||||||||
Total Operating Revenue | 528.0 | 534.4 | 526.2 | 539.4 | 538.5 | 573.0 | 573.1 | 573.3 | 586.7 | |||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||||
Benefits paid or provided: | ||||||||||||||||||||||||||||
Benefits | 54.1 | 52.0 | 40.5 | 43.4 | 52.4 | 61.5 | 59.2 | 49.9 | 50.9 | |||||||||||||||||||
Interest credited to policy balances | 207.8 | 208.0 | 209.9 | 210.4 | 204.7 | 206.4 | 204.9 | 202.9 | 200.6 | |||||||||||||||||||
Def. sales inducements net of amortization | (9.0 | ) | (9.8 | ) | (10.4 | ) | (11.5 | ) | (9.4 | ) | (11.7 | ) | (11.5 | ) | (11.3 | ) | (10.5 | ) | ||||||||||
Total insurance benefits | 252.8 | 250.2 | 240.0 | 242.2 | 247.8 | 256.2 | 252.5 | 241.6 | 241.0 | |||||||||||||||||||
Underwriting, acquisition, | ||||||||||||||||||||||||||||
insurance and other expenses: | ||||||||||||||||||||||||||||
Commissions and other volume-related expenses | 141.8 | 146.9 | 141.3 | 156.7 | 149.7 | 153.4 | 160.4 | 162.8 | 173.0 | |||||||||||||||||||
Operating and administrative expenses | 51.7 | 58.1 | 62.5 | 59.6 | 56.8 | 64.2 | 68.4 | 69.8 | 56.1 | |||||||||||||||||||
Taxes, licenses and fees | 5.2 | 3.7 | 3.2 | 2.5 | 3.9 | 2.4 | 2.7 | 1.5 | 3.7 | |||||||||||||||||||
Subtotal | 198.7 | 208.7 | 207.0 | 218.8 | 210.4 | 220.0 | 231.5 | 234.0 | 232.8 | |||||||||||||||||||
DAC deferral net of amortization | (60.4 | ) | (61.2 | ) | (77.3 | ) | (49.0 | ) | (49.4 | ) | (64.1 | ) | (104.4 | ) | (58.0 | ) | (56.3 | ) | ||||||||||
VOBA amortization | 3.3 | 2.9 | 11.5 | 2.3 | 2.4 | 2.4 | 9.6 | 2.4 | 2.7 | |||||||||||||||||||
Total underwriting, acquisition, | ||||||||||||||||||||||||||||
insurance and other expenses | 141.6 | 150.4 | 141.1 | 172.1 | 163.3 | 158.3 | 136.7 | 178.4 | 179.2 | |||||||||||||||||||
Total Operating Expenses | 394.4 | 400.6 | 381.2 | 414.3 | 411.1 | 414.4 | 389.2 | 420.0 | 420.2 | |||||||||||||||||||
Operating income before federal taxes | 133.6 | 133.8 | 145.0 | 125.1 | 127.4 | 158.6 | 183.9 | 153.4 | 166.5 | |||||||||||||||||||
Federal income taxes | 31.4 | 32.1 | 34.9 | 24.7 | 28.8 | 39.2 | 47.7 | 36.1 | 43.3 | |||||||||||||||||||
Income from Operations | $ | 102.2 | $ | 101.8 | $ | 110.2 | $ | 100.5 | $ | 98.6 | $ | 119.4 | $ | 136.2 | $ | 117.3 | $ | 123.1 | ||||||||||
Effective tax rate | 23.5 | % | 24.0 | % | 24.1 | % | 19.7 | % | 22.6 | % | 24.7 | % | 25.9 | % | 23.5 | % | 26.0 | % | ||||||||||
Average capital | $ | 2,532.6 | $ | 2,575.1 | $ | 2,560.5 | $ | 2,688.4 | $ | 2,661.3 | $ | 2,718.3 | $ | 2,840.7 | $ | 2,968.0 | $ | 3,057.8 | ||||||||||
Return on average capital | 16.1 | % | 15.8 | % | 17.2 | % | 14.9 | % | 14.8 | % | 17.6 | % | 19.2 | % | 15.8 | % | 16.1 | % | ||||||||||
Roll Forward of Deferred Acquisition Costs | ||||||||||||||||||||||||||||
Balance at beginning of period | $ | 854.6 | $ | 748.7 | $ | 1,056.2 | $ | 984.6 | $ | 1,040.4 | $ | 1,214.0 | $ | 1,174.8 | $ | 1,380.6 | $ | 1,480.5 | ||||||||||
Deferral | 101.9 | 105.5 | 101.5 | 112.9 | 107.0 | 112.7 | 114.4 | 121.3 | 125.5 | |||||||||||||||||||
Amortization | (41.5 | ) | (44.4 | ) | (24.2 | ) | (63.9 | ) | (57.6 | ) | (48.6 | ) | (10.0 | ) | (63.3 | ) | (69.2 | ) | ||||||||||
Included in Total Benefits and Expenses | 60.4 | 61.2 | 77.3 | 49.0 | 49.4 | 64.1 | 104.4 | 58.0 | 56.3 | |||||||||||||||||||
Adjustment related to realized (gains) losses | ||||||||||||||||||||||||||||
on available-for-sale securities | (10.2 | ) | (6.0 | ) | (1.8 | ) | (10.3 | ) | (10.1 | ) | (8.4 | ) | (8.0 | ) | (7.0 | ) | (6.8 | ) | ||||||||||
Adjustment related to unrealized (gains) losses | ||||||||||||||||||||||||||||
on available-for-sale securities | (113.9 | ) | 252.4 | (147.2 | ) | 17.0 | 134.2 | (94.8 | ) | 109.5 | 48.9 | 84.2 | ||||||||||||||||
Other | - | - | ||||||||||||||||||||||||||
Cumulative effect of accounting change | (42.3 | ) | - | - | - | - | - | - | - | - | ||||||||||||||||||
Balance at end of period | $ | 748.7 | $ | 1,056.2 | $ | 984.6 | $ | 1,040.4 | $ | 1,214.0 | $ | 1,174.8 | $ | 1,380.6 | $ | 1,480.5 | $ | 1,614.2 | ||||||||||
Roll Forward of Value of Business Acquired | ||||||||||||||||||||||||||||
Balance at beginning of period | $ | 113.2 | $ | 109.4 | $ | 106.4 | $ | 94.9 | $ | 92.6 | $ | 90.3 | $ | 87.9 | $ | 78.3 | $ | 76.0 | ||||||||||
Amortization | (3.3 | ) | (2.9 | ) | (11.5 | ) | (2.3 | ) | (2.4 | ) | (2.4 | ) | (9.6 | ) | (2.4 | ) | (2.7 | ) | ||||||||||
Cumulative effect of accounting change | (0.6 | ) | - | - | - | - | - | - | - | - | ||||||||||||||||||
Balance at end of period | $ | 109.4 | $ | 106.4 | $ | 94.9 | $ | 92.6 | $ | 90.3 | $ | 87.9 | $ | 78.3 | $ | 76.0 | $ | 73.3 |
3/31/2006 | PAGE 19 | |||||||||||||||
Lincoln Retirement | ||||||||||||||||
Account Value Rollforward | ||||||||||||||||
Unaudited [Billions of Dollars] | ||||||||||||||||
2001 | 2002 | 2003 | 2004 | 2005 | ||||||||||||
Fixed Annuities - Balance at Beginning of Year | $ | 16.615 | $ | 18.004 | $ | 20.087 | $ | 21.220 | $ | 21.565 | ||||||
Gross Deposits | 3.342 | 3.672 | 3.125 | 3.110 | 2.947 | |||||||||||
Withdrawals & deaths | (2.448 | ) | (2.637 | ) | (2.074 | ) | (2.227 | ) | (2.714 | ) | ||||||
Net flows | 0.894 | 1.035 | 1.051 | 0.884 | 0.234 | |||||||||||
Transfer from (to) var annuities | (0.428 | ) | 0.108 | (0.817 | ) | (1.395 | ) | (1.548 | ) | |||||||
Interest credited | 0.923 | 0.940 | 0.899 | 0.856 | 0.838 | |||||||||||
Fixed Annuities-Gross | 18.004 | 20.087 | 21.220 | 21.565 | 21.089 | |||||||||||
Reinsurance Ceded | (1.514 | ) | (2.003 | ) | (2.353 | ) | (2.297 | ) | (2.233 | ) | ||||||
Fixed Annuities - Balance at End of Year* | $ | 16.491 | $ | 18.085 | $ | 18.868 | $ | 19.268 | $ | 18.856 | ||||||
Variable Annuities - Balance at Beginning of Year | $ | 39.053 | $ | 33.999 | $ | 26.550 | $ | 33.930 | $ | 40.362 | ||||||
Gross Deposits | 2.792 | 2.381 | 2.505 | 5.082 | 6.296 | |||||||||||
Withdrawals & deaths | (3.905 | ) | (3.394 | ) | (3.181 | ) | (3.797 | ) | (4.299 | ) | ||||||
Net flows | (1.113 | ) | (1.014 | ) | (0.676 | ) | 1.285 | 1.997 | ||||||||
Transfer from (to) fixed annuities | 0.435 | (0.092 | ) | 0.803 | 1.387 | 1.559 | ||||||||||
Invest inc & change in mkt value | (4.376 | ) | (6.344 | ) | 7.253 | 3.760 | 3.683 | |||||||||
Var Annuities - Balance at End of Year ** | $ | 33.999 | $ | 26.550 | $ | 33.930 | $ | 40.362 | $ | 47.601 | ||||||
Total Annuities - Balance at Beginning of Year | $ | 55.668 | $ | 52.003 | $ | 46.637 | $ | 55.150 | $ | 61.927 | ||||||
Gross Deposits | 6.134 | 6.053 | 5.630 | 8.192 | 9.244 | |||||||||||
Withdrawals & deaths | (6.353 | ) | (6.032 | ) | (5.255 | ) | (6.023 | ) | (7.013 | ) | ||||||
Net flows | (0.219 | ) | 0.021 | 0.375 | 2.169 | 2.231 | ||||||||||
Transfers | 0.007 | 0.017 | (0.014 | ) | (0.008 | ) | 0.011 | |||||||||
Interest credited & change in mkt value | (3.453 | ) | (5.404 | ) | 8.152 | 4.616 | 4.521 | |||||||||
Total Gross Annuities- Balance at End of Year | 52.003 | 46.637 | 55.150 | 61.927 | 68.690 | |||||||||||
Reinsurance Ceded | (1.514 | ) | (2.003 | ) | (2.353 | ) | (2.297 | ) | (2.233 | ) | ||||||
Total Annuities (Net of Ceded) - Balance at End of Year | $ | 50.490 | $ | 44.634 | $ | 52.797 | $ | 59.629 | $ | 66.457 | ||||||
Alliance Mutual Funds - Balance at Beg of Year*** | $ | 0.375 | $ | 0.639 | $ | 0.888 | $ | 1.856 | $ | 2.861 | ||||||
Gross Deposits | 0.275 | 0.362 | 0.614 | 0.828 | 1.066 | |||||||||||
Withdrawals & deaths | 0.049 | 0.069 | 0.019 | (0.075 | ) | (0.410 | ) | |||||||||
Net flows | 0.324 | 0.432 | 0.632 | 0.753 | 0.656 | |||||||||||
Transfers | (0.007 | ) | (0.030 | ) | 0.007 | (0.031 | ) | (0.007 | ) | |||||||
Interest credited & change in mkt value | (0.052 | ) | (0.153 | ) | 0.330 | 0.282 | 0.262 | |||||||||
Total Alliance Mutual Funds - Balance at End of Year | $ | 0.639 | $ | 0.888 | $ | 1.856 | $ | 2.861 | $ | 3.772 | ||||||
Total Annuities and Alliance Mutual Funds - | ||||||||||||||||
Balance Beginning of Year | $ | 56.042 | $ | 52.642 | $ | 47.525 | $ | 57.006 | $ | 64.788 | ||||||
Gross Deposits | 6.409 | 6.415 | 6.244 | 9.020 | 10.310 | |||||||||||
Withdrawals & deaths | (6.304 | ) | (5.962 | ) | (5.236 | ) | (6.098 | ) | (7.423 | ) | ||||||
Net flows | 0.105 | 0.453 | 1.007 | 2.922 | 2.887 | |||||||||||
Transfers | (0.000 | ) | (0.013 | ) | (0.008 | ) | (0.039 | ) | 0.004 | |||||||
Interest credited & change in mkt value | (3.505 | ) | (5.558 | ) | 8.482 | 4.898 | 4.783 | |||||||||
Total Gross Annuities and Alliance - Balance End of Year | 52.642 | 47.525 | 57.006 | 64.788 | 72.462 | |||||||||||
Reinsurance Ceded | (1.514 | ) | (2.003 | ) | (2.353 | ) | (2.297 | ) | (2.233 | ) | ||||||
Total Annuities and Alliance Mutual Funds | ||||||||||||||||
Balance at End of Year - (net of ceded) | $ | 51.128 | $ | 45.522 | $ | 54.653 | $ | 62.491 | $ | 70.229 | ||||||
Run-off Group Pension Accounts - Not Included above | 3.060 | 2.844 | 2.947 | 2.906 | 2.737 | |||||||||||
Total Retirement Segment Account Values - (net of ceded) | $ | 54.189 | $ | 48.367 | $ | 57.600 | $ | 65.397 | $ | 72.966 | ||||||
Var Ann Under Agreement - Included above | 0.438 | 0.298 | 0.310 | 0.266 | 0.216 | |||||||||||
Incremental Deposits****: | ||||||||||||||||
Fixed Annuities Incremental Deposits | $ | 3.213 | $ | 3.600 | $ | 3.067 | $ | 3.046 | $ | 2.828 | ||||||
Variable Annuities Incremental Deposits | 1.985 | 2.207 | 2.405 | 4.928 | 6.164 | |||||||||||
Total Annuities Incremental Deposits | 5.198 | 5.807 | 5.472 | 7.974 | 8.992 | |||||||||||
Total Alliance Mutual Funds Incremental Deposits | 0.639 | 0.362 | 0.614 | 0.828 | 1.066 | |||||||||||
Total Annuities and Alliance Mutual Funds | ||||||||||||||||
Incremental Deposits | $ | 5.837 | $ | 6.170 | $ | 6.086 | $ | 8.802 | $ | 10.058 | ||||||
* 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. |
3/31/2006 | PAGE 20 | ||||||||||||||||||||||||||||||||||||
Lincoln Retirement | |||||||||||||||||||||||||||||||||||||
Account Value Rollforward | |||||||||||||||||||||||||||||||||||||
Unaudited [Billions of Dollars] | |||||||||||||||||||||||||||||||||||||
Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | ||||||||||||||||||||||||||
2003 | 2003 | 2003 | 2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | ||||||||||||||||||||||||||
Fixed Annuities - Balance at Beginning of Quarter | $ | 20.612 | $ | 20.864 | $ | 21.132 | $ | 21.221 | $ | 21.281 | $ | 21.476 | $ | 21.633 | $ | 21.565 | $ | 21.375 | $ | 21.417 | $ | 21.319 | $ | 21.089 | |||||||||||||
Gross Deposits | 0.778 | 0.778 | 0.792 | 0.817 | 0.779 | 0.783 | 0.732 | 0.740 | 0.793 | 0.718 | 0.696 | 0.693 | |||||||||||||||||||||||||
Withdrawals & deaths | (0.501 | ) | (0.492 | ) | (0.557 | ) | (0.571 | ) | (0.515 | ) | (0.554 | ) | (0.587 | ) | (0.778 | ) | (0.632 | ) | (0.629 | ) | (0.676 | ) | (0.712 | ) | |||||||||||||
Net flows | 0.277 | 0.286 | 0.235 | 0.246 | 0.264 | 0.228 | 0.145 | (0.038 | ) | 0.161 | 0.090 | 0.021 | (0.019 | ) | |||||||||||||||||||||||
Transfer to var annuities | (0.250 | ) | (0.243 | ) | (0.369 | ) | (0.399 | ) | (0.280 | ) | (0.287 | ) | (0.429 | ) | (0.359 | ) | (0.329 | ) | (0.399 | ) | (0.460 | ) | (0.446 | ) | |||||||||||||
Interest credited | 0.226 | 0.225 | 0.223 | 0.213 | 0.211 | 0.215 | 0.216 | 0.207 | 0.210 | 0.212 | 0.209 | 0.205 | |||||||||||||||||||||||||
Fixed Annuities - Gross | 20.864 | 21.132 | 21.221 | 21.281 | 21.476 | 21.633 | 21.565 | 21.375 | 21.417 | �� | 21.319 | 21.089 | 20.829 | ||||||||||||||||||||||||
Reinsurance Ceded | (2.169 | ) | (2.264 | ) | (2.353 | ) | (2.350 | ) | (2.333 | ) | (2.316 | ) | (2.297 | ) | (2.291 | ) | (2.277 | ) | (2.257 | ) | (2.233 | ) | (2.202 | ) | |||||||||||||
Fixed Annuities - Balance at End of Quarter* | $ | 18.696 | $ | 18.868 | $ | 18.868 | $ | 18.930 | $ | 19.143 | $ | 19.317 | $ | 19.268 | $ | 19.084 | $ | 19.141 | $ | 19.062 | $ | 18.856 | $ | 18.628 | |||||||||||||
Variable Annuities - Balance at Beginning of Quarter | $ | 25.402 | $ | 29.121 | $ | 30.185 | $ | 33.930 | $ | 35.457 | $ | 36.064 | $ | 36.268 | $ | 40.362 | $ | 40.510 | $ | 42.319 | $ | 45.059 | $ | 47.601 | |||||||||||||
Gross Deposits | 0.468 | 0.651 | 0.933 | 1.156 | 1.237 | 1.257 | 1.433 | 1.478 | 1.513 | 1.585 | 1.720 | 1.877 | |||||||||||||||||||||||||
Withdrawals & deaths | (0.759 | ) | (0.798 | ) | (0.798 | ) | (0.930 | ) | (0.973 | ) | (0.904 | ) | (0.990 | ) | (1.012 | ) | (1.018 | ) | (1.136 | ) | (1.134 | ) | (1.263 | ) | |||||||||||||
Net flows | (0.291 | ) | (0.147 | ) | 0.135 | 0.226 | 0.264 | 0.352 | 0.443 | 0.466 | 0.495 | 0.450 | 0.586 | 0.615 | |||||||||||||||||||||||
Transfer from fixed annuities | 0.249 | 0.238 | 0.361 | 0.393 | 0.279 | 0.288 | 0.427 | 0.363 | 0.333 | 0.400 | 0.464 | 0.445 | |||||||||||||||||||||||||
Invest inc & change in mkt value | 3.761 | 0.973 | 3.249 | 0.908 | 0.064 | (0.436 | ) | 3.224 | (0.681 | ) | 0.981 | 1.890 | 1.493 | 2.164 | |||||||||||||||||||||||
Variable Annuities - Balance at End of Quarter ** | $ | 29.121 | $ | 30.185 | $ | 33.930 | $ | 35.457 | $ | 36.064 | $ | 36.268 | $ | 40.362 | $ | 40.510 | $ | 42.319 | $ | 45.059 | $ | 47.601 | $ | 50.825 | |||||||||||||
Total Annuities - Balance at Beginning of Quarter | $ | 46.014 | $ | 49.985 | $ | 51.318 | $ | 55.151 | $ | 56.738 | $ | 57.540 | $ | 57.901 | $ | 61.927 | $ | 61.885 | $ | 63.736 | $ | 66.378 | $ | 68.690 | |||||||||||||
Gross Deposits | 1.247 | 1.430 | 1.725 | 1.973 | 2.016 | 2.039 | 2.164 | 2.218 | 2.306 | 2.304 | 2.416 | 2.570 | |||||||||||||||||||||||||
Withdrawals & deaths | (1.261 | ) | (1.290 | ) | (1.355 | ) | (1.501 | ) | (1.487 | ) | (1.459 | ) | (1.576 | ) | (1.790 | ) | (1.650 | ) | (1.764 | ) | (1.809 | ) | (1.974 | ) | |||||||||||||
Net flows | (0.014 | ) | 0.139 | 0.370 | 0.472 | 0.528 | 0.581 | 0.588 | 0.428 | 0.657 | 0.539 | 0.607 | 0.596 | ||||||||||||||||||||||||
Transfers | (0.001 | ) | (0.005 | ) | (0.008 | ) | (0.006 | ) | (0.001 | ) | 0.001 | (0.002 | ) | 0.004 | 0.003 | 0.000 | 0.003 | (0.001 | ) | ||||||||||||||||||
Interest credited & change in mkt value | 3.986 | 1.198 | 3.472 | 1.121 | 0.275 | (0.221 | ) | 3.440 | (0.474 | ) | 1.191 | 2.102 | 1.702 | 2.369 | |||||||||||||||||||||||
Total Annuities - Gross | 49.985 | 51.318 | 55.151 | 56.738 | 57.540 | 57.901 | 61.927 | 61.885 | 63.736 | 66.378 | 68.690 | 71.654 | |||||||||||||||||||||||||
Reinsurance Ceded | (2.169 | ) | (2.264 | ) | (2.353 | ) | (2.350 | ) | (2.333 | ) | (2.316 | ) | (2.297 | ) | (2.291 | ) | (2.277 | ) | (2.257 | ) | (2.233 | ) | (2.202 | ) | |||||||||||||
Total Annuities (Net of Ceded) - Bal at End of Quarter | $ | 47.817 | $ | 49.053 | $ | 52.798 | $ | 54.387 | $ | 55.207 | $ | 55.585 | $ | 59.630 | $ | 59.594 | $ | 61.460 | $ | 64.120 | $ | 66.457 | $ | 69.452 | |||||||||||||
Alliance Mutual Funds - Balance at Beginning of Quarter*** | $ | 1.072 | $ | 1.336 | $ | 1.524 | $ | 1.856 | $ | 2.162 | $ | 2.335 | $ | 2.430 | $ | 2.861 | $ | 3.163 | $ | 3.432 | $ | 3.672 | $ | 3.772 | |||||||||||||
Gross Deposits | 0.116 | 0.148 | 0.154 | 0.251 | 0.187 | 0.167 | 0.223 | 0.421 | 0.222 | 0.200 | 0.223 | 0.318 | |||||||||||||||||||||||||
Withdrawals & deaths | (0.002 | ) | (0.011 | ) | 0.012 | (0.011 | ) | (0.015 | ) | (0.032 | ) | (0.017 | ) | (0.074 | ) | (0.022 | ) | (0.107 | ) | (0.208 | ) | (0.056 | ) | ||||||||||||||
Net flows | 0.113 | 0.138 | 0.165 | 0.240 | 0.172 | 0.135 | 0.206 | 0.347 | 0.201 | 0.093 | 0.014 | 0.262 | |||||||||||||||||||||||||
Transfers | (0.001 | ) | 0.006 | 0.004 | 0.007 | (0.013 | ) | (0.025 | ) | 0.000 | 0.002 | (0.006 | ) | (0.000 | ) | (0.003 | ) | 0.005 | |||||||||||||||||||
Interest credited & change in mkt value | 0.151 | 0.045 | 0.162 | 0.060 | 0.013 | (0.014 | ) | 0.225 | (0.048 | ) | 0.075 | 0.147 | 0.088 | 0.209 | |||||||||||||||||||||||
Total Alliance Mutual Funds - Balance at End of Quarter | $ | 1.336 | $ | 1.524 | $ | 1.856 | $ | 2.162 | $ | 2.335 | $ | 2.430 | $ | 2.861 | $ | 3.163 | $ | 3.432 | $ | 3.672 | $ | 3.772 | $ | 4.248 | |||||||||||||
Total Annuities and Alliance Mutual Funds - | |||||||||||||||||||||||||||||||||||||
Balance at Beginning of Quarter | $ | 47.086 | $ | 51.321 | $ | 52.842 | $ | 57.007 | $ | 58.900 | $ | 59.875 | $ | 60.331 | $ | 64.788 | $ | 65.048 | $ | 67.168 | $ | 70.050 | $ | 72.462 | |||||||||||||
Gross Deposits | 1.363 | 1.578 | 1.879 | 2.223 | 2.203 | 2.207 | 2.387 | 2.639 | 2.529 | 2.504 | 2.639 | 2.888 | |||||||||||||||||||||||||
Withdrawals & deaths | (1.263 | ) | (1.301 | ) | (1.343 | ) | (1.512 | ) | (1.503 | ) | (1.490 | ) | (1.593 | ) | (1.863 | ) | (1.671 | ) | (1.871 | ) | (2.018 | ) | (2.030 | ) | |||||||||||||
Net flows | 0.099 | 0.277 | 0.536 | 0.712 | 0.701 | 0.716 | 0.794 | 0.776 | 0.857 | 0.633 | 0.621 | 0.858 | |||||||||||||||||||||||||
Transfers | (0.002 | ) | 0.001 | (0.004 | ) | 0.001 | (0.014 | ) | (0.024 | ) | (0.002 | ) | 0.006 | (0.003 | ) | 0.000 | 0.000 | 0.005 | |||||||||||||||||||
Interest credited & change in mkt value | 4.137 | 1.243 | 3.634 | 1.181 | 0.288 | (0.235 | ) | 3.665 | (0.522 | ) | 1.266 | 2.249 | 1.790 | 2.578 | |||||||||||||||||||||||
Total Gross Annuities and Alliance Mutual Funds - | |||||||||||||||||||||||||||||||||||||
Balance at End of Quarter | 51.321 | 52.842 | 57.007 | 58.900 | 59.875 | 60.331 | 64.788 | 65.048 | 67.168 | 70.050 | 72.462 | 75.902 | |||||||||||||||||||||||||
Reinsurance Ceded | (2.169 | ) | (2.264 | ) | (2.353 | ) | (2.350 | ) | (2.333 | ) | (2.316 | ) | (2.297 | ) | (2.291 | ) | (2.277 | ) | (2.257 | ) | (2.233 | ) | (2.202 | ) | |||||||||||||
Total Annuities and Alliance Mutual Funds | |||||||||||||||||||||||||||||||||||||
Balance at End of Quarter (net of ceded) | $ | 49.152 | $ | 50.577 | $ | 54.654 | $ | 56.550 | $ | 57.542 | $ | 58.016 | $ | 62.491 | $ | 62.757 | $ | 64.892 | $ | 67.793 | $ | 70.229 | $ | 73.700 | |||||||||||||
Run-off Group Pension Accounts - Not Included Above | 2.888 | 2.888 | 2.947 | 2.943 | 2.910 | 2.857 | 2.906 | 2.886 | 2.883 | 2.877 | 2.737 | 2.753 | |||||||||||||||||||||||||
Total Retirement Segment Account Values - (net of ceded) | $ | 52.040 | $ | 53.466 | $ | 57.601 | $ | 59.493 | $ | 60.452 | $ | 60.872 | $ | 65.397 | $ | 65.643 | $ | 67.775 | $ | 70.669 | $ | 72.966 | $ | 76.453 | |||||||||||||
Var Ann Under Agreement - Included above | 0.301 | 0.296 | 0.310 | 0.301 | 0.283 | 0.261 | 0.266 | 0.244 | 0.232 | 0.226 | 0.216 | 0.208 | |||||||||||||||||||||||||
Incremental Deposits****: | |||||||||||||||||||||||||||||||||||||
Fixed Annuities Incremental Deposits | $ | 0.768 | $ | 0.767 | $ | 0.779 | $ | 0.795 | $ | 0.767 | $ | 0.767 | $ | 0.718 | $ | 0.719 | $ | 0.779 | $ | 0.689 | $ | 0.642 | $ | 0.680 | |||||||||||||
Variable Annuities Incremental Deposits | 0.444 | 0.628 | 0.899 | 1.120 | 1.194 | 1.212 | 1.402 | 1.443 | 1.476 | 1.558 | 1.687 | 1.851 | |||||||||||||||||||||||||
Total Annuities Incremental Deposits | 1.212 | 1.394 | 1.679 | 1.914 | 1.961 | 1.979 | 2.120 | 2.162 | 2.256 | 2.247 | 2.328 | 2.531 | |||||||||||||||||||||||||
Total Alliance Mutual Funds Incremental Deposits | 0.116 | 0.148 | 0.154 | 0.251 | 0.187 | 0.167 | 0.223 | 0.421 | 0.222 | 0.200 | 0.223 | 0.318 | |||||||||||||||||||||||||
Total Annuities and Alliance Mutual Funds Incremental Deposits | $ | 1.328 | $ | 1.543 | $ | 1.833 | $ | 2.165 | $ | 2.148 | $ | 2.146 | $ | 2.342 | $ | 2.582 | $ | 2.478 | $ | 2.447 | $ | 2.551 | $ | 2.849 | |||||||||||||
* 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. |
3/31/2006 | PAGE 21 | |||||||||||||||
Lincoln Retirement | ||||||||||||||||
Account Values | ||||||||||||||||
Unaudited [Billions of Dollars] | ||||||||||||||||
2001 | 2002 | 2003 | 2004 | 2005 | ||||||||||||
Fixed Annuities - excluding fixed portion of variable contracts | ||||||||||||||||
Deposits | $ | 1.712 | $ | 1.844 | $ | 1.415 | $ | 1.026 | $ | 0.681 | ||||||
Withdrawals | (1.604 | ) | (1.473 | ) | (0.934 | ) | (1.119 | ) | (1.456 | ) | ||||||
Net Flows | $ | 0.108 | $ | 0.371 | $ | 0.481 | $ | (0.093 | ) | $ | (0.776 | ) | ||||
Gross Fixed Contract Account Values | $ | 10.475 | $ | 11.440 | $ | 11.820 | $ | 11.519 | ||||||||
Reinsurance Ceded | (2.003 | ) | (2.353 | ) | (2.297 | ) | (2.233 | ) | ||||||||
Net Fixed Contract Account Values | $ | 8.473 | $ | 9.087 | $ | 9.522 | $ | 9.286 | ||||||||
Fixed Portion of Variable Contracts | ||||||||||||||||
Deposits | $ | 1.630 | $ | 1.828 | $ | 1.710 | $ | 2.085 | $ | 2.267 | ||||||
Withdrawals | (0.844 | ) | (1.164 | ) | (1.140 | ) | (1.108 | ) | (1.257 | ) | ||||||
Net Flows | $ | 0.786 | $ | 0.664 | $ | 0.570 | $ | 0.977 | $ | 1.010 | ||||||
Fixed Portion of Variable Contract Account Values | $ | 9.612 | $ | 9.781 | $ | 9.746 | $ | 9.570 | ||||||||
Variable Annuities - including fixed portion of variable contracts | ||||||||||||||||
Deposits | $ | 4.422 | $ | 4.208 | $ | 4.215 | $ | 7.166 | $ | 8.563 | ||||||
Withdrawals | (4.748 | ) | (4.558 | ) | (4.320 | ) | (4.904 | ) | (5.556 | ) | ||||||
Net Flows | $ | (0.326 | ) | $ | (0.350 | ) | $ | (0.106 | ) | $ | 2.262 | $ | 3.007 | |||
Variable Contract Account Values | $ | 36.162 | $ | 43.711 | $ | 50.108 | $ | 57.171 | ||||||||
Average Daily Variable Annuity Account Values | $ | 35.054 | $ | 30.026 | $ | 29.002 | $ | 36.018 | $ | 42.816 | ||||||
Alliance Mutual Funds Contracts | ||||||||||||||||
Deposits | $ | 0.275 | $ | 0.362 | $ | 0.614 | $ | 0.828 | $ | 1.066 | ||||||
Withdrawals | 0.049 | 0.069 | 0.019 | (0.075 | ) | (0.410 | ) | |||||||||
Net Flows | $ | 0.324 | $ | 0.432 | $ | 0.632 | $ | 0.753 | $ | 0.656 | ||||||
Alliance Mutual Funds Contract Account Values* | $ | 0.639 | $ | 0.888 | $ | 1.856 | $ | 2.861 | $ | 3.772 | ||||||
Average Daily Alliance Mutual Funds Acct Vals* | $ | 0.519 | $ | 0.800 | $ | 1.371 | $ | 2.304 | $ | 3.401 | ||||||
* 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) | 7.38 | % | 6.98 | % | 6.41 | % | 6.28 | % | 6.07 | % | ||||||
Interest credited to policyholders | 5.33 | % | 4.87 | % | 4.25 | % | 3.92 | % | 3.81 | % | ||||||
Spread (2) (3) | 2.05 | % | 2.11 | % | 2.16 | % | 2.37 | % | 2.26 | % | ||||||
(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 8 bps in 2005, 20 bps in 2004, 6 bps in 2003 and 7 bps in 2002. | ||||||||||||||||
(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 the full year. | ||||||||||||||||
3/31/2006 | PAGE 22 | ||||||||||||||||||||||||||||||||||||
Lincoln Retirement | |||||||||||||||||||||||||||||||||||||
Account Values | |||||||||||||||||||||||||||||||||||||
Unaudited [Billions of Dollars] | |||||||||||||||||||||||||||||||||||||
Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | ||||||||||||||||||||||||||
2003 | 2003 | 2003 | 2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | ||||||||||||||||||||||||||
Fixed Annuities - excluding fixed portion of variable contracts | |||||||||||||||||||||||||||||||||||||
Deposits | $ | 0.356 | $ | 0.344 | $ | 0.347 | $ | 0.365 | $ | 0.249 | $ | 0.220 | $ | 0.192 | $ | 0.198 | $ | 0.180 | $ | 0.145 | $ | 0.158 | $ | 0.162 | |||||||||||||
Withdrawals | (0.235 | ) | (0.238 | ) | (0.253 | ) | (0.269 | ) | (0.261 | ) | (0.286 | ) | (0.302 | ) | (0.454 | ) | (0.303 | ) | (0.326 | ) | (0.374 | ) | (0.376 | ) | |||||||||||||
Net Flows | $ | 0.121 | $ | 0.106 | $ | 0.094 | $ | 0.096 | $ | (0.013 | ) | $ | (0.066 | ) | $ | (0.110 | ) | $ | (0.256 | ) | $ | (0.123 | ) | $ | (0.182 | ) | $ | (0.216 | ) | $ | (0.214 | ) | |||||
Gross Fixed Contract Account Values | $ | 11.001 | $ | 11.226 | $ | 11.440 | $ | 11.649 | $ | 11.755 | $ | 11.811 | $ | 11.820 | $ | 11.684 | $ | 11.681 | $ | 11.618 | $ | 11.519 | $ | 11.421 | |||||||||||||
Reinsurance Ceded | (2.169 | ) | (2.264 | ) | (2.353 | ) | (2.350 | ) | (2.333 | ) | (2.316 | ) | (2.297 | ) | (2.291 | ) | (2.277 | ) | (2.257 | ) | (2.233 | ) | (2.202 | ) | |||||||||||||
Net Fixed Contract Account Values | $ | 8.832 | $ | 8.962 | $ | 9.087 | $ | 9.299 | $ | 9.422 | $ | 9.495 | $ | 9.522 | $ | 9.392 | $ | 9.404 | $ | 9.360 | $ | 9.286 | $ | 9.219 | |||||||||||||
Fixed Portion of Variable Contracts | |||||||||||||||||||||||||||||||||||||
Deposits | $ | 0.422 | $ | 0.434 | $ | 0.445 | $ | 0.452 | $ | 0.530 | $ | 0.563 | $ | 0.540 | $ | 0.541 | $ | 0.613 | $ | 0.574 | $ | 0.539 | $ | 0.531 | |||||||||||||
Withdrawals | (0.266 | ) | (0.254 | ) | (0.304 | ) | (0.302 | ) | (0.253 | ) | (0.268 | ) | (0.284 | ) | (0.324 | ) | (0.329 | ) | (0.302 | ) | (0.302 | ) | (0.335 | ) | |||||||||||||
Net Flows | $ | 0.156 | $ | 0.180 | $ | 0.141 | $ | 0.151 | $ | 0.277 | $ | 0.294 | $ | 0.255 | $ | 0.218 | $ | 0.284 | $ | 0.271 | $ | 0.237 | $ | 0.195 | |||||||||||||
Fixed Portion of Variable Contract Account Values | $ | 9.864 | $ | 9.906 | $ | 9.781 | $ | 9.631 | $ | 9.721 | $ | 9.822 | $ | 9.746 | $ | 9.691 | $ | 9.736 | $ | 9.702 | $ | 9.570 | $ | 9.409 | |||||||||||||
Variable Annuities - including fixed portion of variable contracts | |||||||||||||||||||||||||||||||||||||
Deposits | $ | 0.891 | $ | 1.086 | $ | 1.378 | $ | 1.608 | $ | 1.767 | $ | 1.819 | $ | 1.972 | $ | 2.020 | $ | 2.126 | $ | 2.159 | $ | 2.258 | $ | 2.408 | |||||||||||||
Withdrawals | (1.026 | ) | (1.052 | ) | (1.102 | ) | (1.232 | ) | (1.226 | ) | (1.172 | ) | (1.274 | ) | (1.336 | ) | (1.347 | ) | (1.438 | ) | (1.436 | ) | (1.598 | ) | |||||||||||||
Net Flows | $ | (0.135 | ) | $ | 0.034 | $ | 0.276 | $ | 0.376 | $ | 0.541 | $ | 0.647 | $ | 0.698 | $ | 0.684 | $ | 0.780 | $ | 0.721 | $ | 0.823 | $ | 0.810 | ||||||||||||
Variable Contract Account Values | $ | 38.985 | $ | 40.091 | $ | 43.711 | $ | 45.088 | $ | 45.785 | $ | 46.090 | $ | 50.108 | $ | 50.202 | $ | 52.056 | $ | 54.760 | $ | 57.171 | $ | 60.233 | |||||||||||||
Average Daily Variable Annuity Account Values | $ | 27.933 | $ | 30.016 | $ | 32.158 | $ | 35.116 | $ | 35.354 | $ | 35.334 | $ | 38.269 | $ | 40.378 | $ | 41.010 | $ | 44.099 | $ | 45.828 | $ | 49.521 | |||||||||||||
Alliance Mutual Fund Contracts | |||||||||||||||||||||||||||||||||||||
Deposits | $ | 0.116 | $ | 0.148 | $ | 0.154 | $ | 0.251 | $ | 0.187 | $ | 0.167 | $ | 0.223 | $ | 0.421 | $ | 0.222 | $ | 0.200 | $ | 0.223 | $ | 0.318 | |||||||||||||
Withdrawals | (0.002 | ) | (0.011 | ) | 0.012 | (0.011 | ) | (0.015 | ) | (0.032 | ) | (0.017 | ) | (0.074 | ) | (0.022 | ) | (0.107 | ) | (0.208 | ) | (0.056 | ) | ||||||||||||||
Net Flows | $ | 0.113 | $ | 0.138 | $ | 0.165 | $ | 0.240 | $ | 0.172 | $ | 0.135 | $ | 0.206 | $ | 0.347 | $ | 0.201 | $ | 0.093 | $ | 0.014 | $ | 0.262 | |||||||||||||
Alliance Mutual Funds Contract Account Values * | $ | 1.336 | $ | 1.524 | $ | 1.856 | $ | 2.162 | $ | 2.335 | $ | 2.430 | $ | 2.861 | $ | 3.163 | $ | 3.432 | $ | 3.672 | $ | 3.772 | $ | 4.248 | |||||||||||||
Average Alliance Mutual Funds Account Values* | $ | 1.262 | $ | 1.474 | $ | 1.739 | $ | 2.044 | $ | 2.211 | $ | 2.341 | $ | 2.620 | $ | 3.038 | $ | 3.270 | $ | 3.592 | $ | 3.728 | $ | 4.032 | |||||||||||||
* 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) | 6.49 | % | 6.42 | % | 6.13 | % | 6.43 | % | 6.34 | % | 6.14 | % | 6.23 | % | 6.05 | % | 6.06 | % | 6.04 | % | 6.13 | % | 6.19 | % | |||||||||||||
Interest credited to policyholders | 4.29 | % | 4.20 | % | 4.09 | % | 3.97 | % | 3.93 | % | 3.90 | % | 3.87 | % | 3.82 | % | 3.81 | % | 3.80 | % | 3.79 | % | 3.78 | % | |||||||||||||
Spread (2)(3) | 2.20 | % | 2.22 | % | 2.04 | % | 2.46 | % | 2.41 | % | 2.24 | % | 2.36 | % | 2.23 | % | 2.25 | % | 2.24 | % | 2.34 | % | 2.40 | % | |||||||||||||
(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 13 bps in the 1st quarter of 2006, 11 bps in the 4th quarter of 2005, 4 bps in the 3rd quarter of 2005, 9 bps in the 2nd quarter of 2005, 8 bps in the 1st quarter of 2005, 17 bps in the 4th quarter of 2004, 19 bps in the 3rd quarter of 2004, 38 bps in the 2nd quarter of 2004 and 7 bps in the first quarter of 2004. | |||||||||||||||||||||||||||||||||||||
(3) 1st quarter 2004 includes income from contingent interest received, which contributed $13 million to net investment income or 27 bps to the yield and spread. |
3/31/2006 | PAGE 23 | |||||||||||||||
Life Insurance Segment | ||||||||||||||||
Income Statements | ||||||||||||||||
Unaudited [Millions of Dollars] | ||||||||||||||||
For the Year Ended December 31 | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||
Operating Revenue | ||||||||||||||||
Premiums | $ | 212.4 | $ | 203.8 | $ | 194.9 | $ | 194.0 | $ | 198.7 | ||||||
Surrender charges | 66.1 | 54.1 | 53.6 | 51.8 | 43.6 | |||||||||||
Mortality assessments | 499.4 | 501.5 | 516.7 | 518.7 | 533.6 | |||||||||||
Expense assessments | 191.4 | 199.5 | 201.8 | 208.6 | 213.1 | |||||||||||
Other revenue and fees | 17.9 | 23.7 | 28.0 | 31.4 | 34.0 | |||||||||||
Net investment income | 910.2 | 899.1 | 911.1 | 948.4 | 970.7 | |||||||||||
Total Operating Revenue | 1,897.5 | 1,881.7 | 1,906.1 | 1,952.9 | 1,993.5 | |||||||||||
Operating Expenses | ||||||||||||||||
Benefits paid or provided: | ||||||||||||||||
Benefits | 418.6 | 427.4 | 416.0 | 404.0 | 422.4 | |||||||||||
Div accum & div to policyholders | 78.5 | 76.0 | 81.6 | 77.4 | 77.7 | |||||||||||
Interest credited to policy bal. | 569.9 | 598.6 | 598.2 | 579.7 | 590.2 | |||||||||||
Total insurance benefits | 1,067.0 | 1,101.9 | 1,095.8 | 1,061.2 | 1,090.3 | |||||||||||
Underwriting, acquisition, | ||||||||||||||||
insurance and other expenses: | ||||||||||||||||
Commissions and other volume-related expenses | 318.4 | 330.2 | 350.1 | 331.1 | 362.6 | |||||||||||
Operating and administrative expenses | 166.8 | 162.2 | 166.2 | 168.6 | 176.4 | |||||||||||
Taxes, licenses and fees | 49.2 | 53.2 | 62.2 | 49.1 | 53.9 | |||||||||||
Subtotal | 534.5 | 545.6 | 578.5 | 548.9 | 592.9 | |||||||||||
DAC deferral net of amortization | (229.8 | ) | (230.7 | ) | (235.2 | ) | (152.2 | ) | (191.9 | ) | ||||||
VOBA amortization | 75.9 | 73.9 | 81.4 | 82.2 | 60.6 | |||||||||||
Total underwriting, acquisition, | ||||||||||||||||
insurance and other expenses | 380.5 | 388.8 | 424.7 | 478.9 | 461.6 | |||||||||||
Goodwill amortization | 23.7 | - | - | - | - | |||||||||||
Total Operating Expenses | 1,471.2 | 1,490.8 | 1,520.6 | 1,540.0 | 1,551.9 | |||||||||||
Operating income before federal taxes | 426.3 | 390.9 | 385.5 | 412.9 | 441.6 | |||||||||||
Federal income taxes | 151.0 | 121.9 | 120.9 | 132.6 | 142.7 | |||||||||||
Income from Operations | $ | 275.3 | $ | 269.0 | $ | 264.5 | $ | 280.3 | $ | 298.9 | ||||||
Effective Tax Rate | 35.4 | % | 31.2 | % | 31.4 | % | 32.1 | % | 32.3 | % | ||||||
Average capital | $ | 2,734.4 | $ | 2,846.3 | $ | 2,849.9 | $ | 3,036.1 | $ | 3,415.4 | ||||||
Return on average capital | 10.1 | % | 9.4 | % | 9.3 | % | 9.2 | % | 8.8 | % | ||||||
Roll Forward of Deferred Acquisition Costs | ||||||||||||||||
Balance at beginning of period | $ | 1,079.3 | $ | 1,265.7 | $ | 1,424.5 | $ | 1,578.3 | $ | 1,691.9 | ||||||
Deferral | 324.8 | 336.5 | 370.8 | 365.2 | 396.9 | |||||||||||
Amortization | (95.0 | ) | (105.8 | ) | (135.5 | ) | (213.0 | ) | (205.0 | ) | ||||||
Included in Total Operating Expenses | 229.8 | 230.7 | 235.2 | 152.2 | 191.9 | |||||||||||
Adjustment related to realized (gains) losses | ||||||||||||||||
on available-for-sale securities | 43.0 | 39.7 | (31.9 | ) | (16.1 | ) | (14.6 | ) | ||||||||
Adjustment related to unrealized (gains) losses | ||||||||||||||||
on available-for-sale securities | (89.0 | ) | (130.9 | ) | (49.5 | ) | (25.6 | ) | 100.7 | |||||||
Other* | 2.5 | 19.3 | - | 3.2 | - | |||||||||||
Balance at end of period | $ | 1,265.7 | $ | 1,424.5 | $ | 1,578.3 | $ | 1,691.9 | $ | 1,970.0 | ||||||
Roll Forward of Value of Business Acquired | ||||||||||||||||
Balance at beginning of period | $ | 1,040.5 | $ | 963.9 | $ | 890.0 | $ | 808.6 | $ | 726.5 | ||||||
Amortization | (75.9 | ) | (73.9 | ) | (81.4 | ) | (82.2 | ) | (60.6 | ) | ||||||
Other | (0.7 | ) | - | - | - | - | ||||||||||
Balance at end of period | $ | 963.9 | $ | 890.0 | $ | 808.6 | $ | 726.5 | $ | 665.8 | ||||||
Roll Forward of Deferred Front-End Loads** | ||||||||||||||||
Balance at beginning of period | $ | 133.0 | $ | 179.7 | $ | 228.6 | $ | 292.7 | $ | 326.6 | ||||||
Deferral | 74.1 | 85.8 | 92.1 | 98.0 | 84.9 | |||||||||||
Amortization | (27.4 | ) | (37.0 | ) | (27.9 | ) | (64.1 | ) | (50.9 | ) | ||||||
Included in Income from Operations | 46.7 | 48.9 | 64.1 | 33.9 | 33.9 | |||||||||||
Balance at end of period | $ | 179.7 | $ | 228.6 | $ | 292.7 | $ | 326.6 | $ | 360.5 | ||||||
*Includes the transfer of the Legacy Life block of business from the Lincoln Retirement segment in the first quarter of 2002. 2004 reflects the DAC unlocking resulting from the implementation of SOP 03-1. | ||||||||||||||||
** Included in Insurance and Investment Contract Liabilities on the Balance Sheet. |
3/31/2006 | PAGE 24 | |||||||||||||||||||||||||||
Life Insurance Segment | ||||||||||||||||||||||||||||
Income Statements | ||||||||||||||||||||||||||||
Unaudited [Millions of Dollars] | ||||||||||||||||||||||||||||
For the Quarter Ended | Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | |||||||||||||||||||
2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | ||||||||||||||||||||
Operating Revenue | ||||||||||||||||||||||||||||
Premiums | $ | 47.9 | $ | 48.3 | $ | 44.3 | $ | 53.6 | $ | 45.6 | $ | 47.9 | $ | 47.5 | $ | 57.8 | $ | 51.2 | ||||||||||
Surrender charges | 13.8 | 12.7 | 11.1 | 14.2 | 12.0 | 9.1 | 10.8 | 11.6 | 10.3 | |||||||||||||||||||
Mortality assessments | 128.5 | 129.6 | 130.1 | 130.5 | 133.3 | 132.7 | 129.8 | 137.8 | 138.4 | |||||||||||||||||||
Expense assessments | 49.8 | 51.0 | 49.8 | 58.0 | 48.8 | 50.2 | 51.8 | 62.3 | 52.8 | |||||||||||||||||||
Other revenue and fees | 7.8 | 8.2 | 7.3 | 8.1 | 8.2 | 8.2 | 8.6 | 8.9 | 8.7 | |||||||||||||||||||
Net investment income | 235.7 | 234.9 | 238.4 | 239.4 | 236.3 | 249.2 | 244.1 | 241.2 | 253.6 | |||||||||||||||||||
Total Operating Revenue | 483.4 | 484.8 | 481.1 | 503.7 | 484.2 | 497.3 | 492.4 | 519.6 | 515.0 | |||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||||
Benefits paid or provided: | ||||||||||||||||||||||||||||
Benefits | 97.4 | 104.4 | 95.8 | 106.4 | 97.4 | 105.0 | 117.9 | 102.0 | 107.5 | |||||||||||||||||||
Div accum & div to policyholders | 18.5 | 18.6 | 16.7 | 23.6 | 18.4 | 18.4 | 17.3 | 23.6 | 17.4 | |||||||||||||||||||
Interest credited to policy bal. | 144.8 | 143.9 | 143.8 | 147.1 | 145.8 | 145.2 | 149.0 | 150.2 | 150.1 | |||||||||||||||||||
Total insurance benefits | 260.7 | 267.0 | 256.3 | 277.2 | 261.6 | 268.6 | 284.3 | 275.8 | 275.0 | |||||||||||||||||||
Underwriting, acquisition, | ||||||||||||||||||||||||||||
insurance and other expenses: | ||||||||||||||||||||||||||||
Commissions and other-volume related expenses | 78.0 | 73.0 | 80.7 | 99.4 | 77.2 | 83.5 | 92.6 | 109.2 | 87.4 | |||||||||||||||||||
Operating and administrative expenses | 38.5 | 40.7 | 46.5 | 42.9 | 40.7 | 42.2 | 50.3 | 43.3 | 35.0 | |||||||||||||||||||
Taxes, licenses and fees | 12.4 | 11.5 | 12.8 | 12.5 | 14.7 | 12.5 | 11.9 | 14.7 | 15.2 | |||||||||||||||||||
Subtotal | 128.9 | 125.2 | 140.0 | 154.7 | 132.6 | 138.2 | 154.8 | 167.3 | 137.5 | |||||||||||||||||||
DAC deferral net of amortization | (35.0 | ) | (37.3 | ) | (25.9 | ) | (54.0 | ) | (25.2 | ) | (34.0 | ) | (76.6 | ) | (56.1 | ) | (35.9 | ) | ||||||||||
VOBA amortization | 18.5 | 17.5 | 29.8 | 16.4 | 15.5 | 12.5 | 18.9 | 13.8 | 13.9 | |||||||||||||||||||
Total underwriting, acquisition, | ||||||||||||||||||||||||||||
insurance and other expenses | 112.4 | 105.4 | 144.0 | 117.1 | 122.9 | 116.7 | 97.1 | 124.9 | 115.6 | |||||||||||||||||||
Total Operating Expenses | 373.1 | 372.4 | 400.3 | 394.3 | 384.5 | 385.3 | 381.3 | 400.8 | 390.6 | |||||||||||||||||||
Operating income before federal taxes | 110.3 | 112.4 | 80.7 | 109.5 | 99.7 | 112.0 | 111.1 | 118.8 | 124.4 | |||||||||||||||||||
Federal income taxes | 35.5 | 36.2 | 25.4 | 35.5 | 32.0 | 36.2 | 36.0 | 38.6 | 42.2 | |||||||||||||||||||
Income from Operations | $ | 74.8 | $ | 76.2 | $ | 55.4 | $ | 74.0 | $ | 67.7 | $ | 75.8 | $ | 75.1 | $ | 80.2 | $ | 82.2 | ||||||||||
Effective Tax Rate | 32.2 | % | 32.2 | % | 31.4 | % | 32.4 | % | 32.1 | % | 32.3 | % | 32.4 | % | 32.5 | % | 33.9 | % | ||||||||||
Average capital | $ | 2,927.4 | $ | 2,993.5 | $ | 3,086.4 | $ | 3,137.0 | $ | 3,300.3 | $ | 3,417.8 | $ | 3,432.9 | $ | 3,510.7 | $ | 3,518.1 | ||||||||||
Return on average capital | 10.2 | % | 10.2 | % | 7.2 | % | 9.4 | % | 8.2 | % | 8.9 | % | 8.8 | % | 9.1 | % | 9.3 | % | ||||||||||
Roll Forward of Deferred Acquisition Costs | ||||||||||||||||||||||||||||
Balance at beginning of period | $ | 1,578.3 | $ | 1,534.8 | $ | 1,734.8 | $ | 1,646.4 | $ | 1,691.9 | $ | 1,786.7 | $ | 1,714.8 | $ | 1,884.1 | $ | 1,970.0 | ||||||||||
Deferral | 83.7 | 81.1 | 90.8 | 109.7 | 85.0 | 91.1 | 102.0 | 118.9 | 95.8 | |||||||||||||||||||
Amortization | (48.7 | ) | (43.8 | ) | (64.9 | ) | (55.7 | ) | (59.8 | ) | (57.0 | ) | (25.3 | ) | (62.8 | ) | (59.9 | ) | ||||||||||
Included in Total Operating Expenses | 35.0 | 37.3 | 25.9 | 54.0 | 25.2 | 34.0 | 76.6 | 56.1 | 35.9 | |||||||||||||||||||
Adjustment related to realized (gains) losses | ||||||||||||||||||||||||||||
on available-for-sale securities | (3.8 | ) | (2.4 | ) | (4.8 | ) | (5.0 | ) | (2.0 | ) | (5.9 | ) | (5.4 | ) | (1.3 | ) | (3.7 | ) | ||||||||||
Adjustment related to unrealized (gains) losses | ||||||||||||||||||||||||||||
on available-for-sale securities | (77.6 | ) | 165.0 | (109.3 | ) | (3.7 | ) | 71.6 | (100.1 | ) | 98.1 | 31.1 | 100.2 | |||||||||||||||
Other* | 3.0 | 0.2 | (0.1 | ) | 0.2 | - | - | - | - | - | ||||||||||||||||||
Balance at end of period | $ | 1,534.8 | $ | 1,734.8 | $ | 1,646.4 | $ | 1,691.9 | $ | 1,786.7 | $ | 1,714.8 | $ | 1,884.1 | $ | 1,970.0 | $ | 2,102.4 | ||||||||||
Roll Forward of Value of Business Acquired | ||||||||||||||||||||||||||||
Balance at beginning of period | $ | 808.6 | $ | 790.1 | $ | 772.6 | $ | 742.8 | $ | 726.5 | $ | 710.9 | $ | 698.5 | $ | 679.6 | $ | 665.8 | ||||||||||
Amortization | (18.5 | ) | (17.5 | ) | (29.8 | ) | (16.4 | ) | (15.5 | ) | (12.5 | ) | (18.9 | ) | (13.8 | ) | (13.9 | ) | ||||||||||
Balance at end of period | $ | 790.1 | $ | 772.6 | $ | 742.8 | $ | 726.5 | $ | 710.9 | $ | 698.5 | $ | 679.6 | $ | 665.8 | $ | 651.9 | ||||||||||
Roll Forward of Deferred Front-End Loads** | ||||||||||||||||||||||||||||
Balance at beginning of period | $ | 292.7 | $ | 301.5 | $ | 312.2 | $ | 316.4 | $ | 326.6 | $ | 327.9 | $ | 331.5 | $ | 355.4 | $ | 360.5 | ||||||||||
Deferral | 22.8 | 24.1 | 23.8 | 27.3 | 21.1 | 20.9 | 19.9 | 23.0 | 20.7 | |||||||||||||||||||
Amortization | (14.0 | ) | (13.4 | ) | (19.6 | ) | (17.1 | ) | (19.7 | ) | (17.3 | ) | 4.0 | (17.9 | ) | (18.0 | ) | |||||||||||
Included in Income from Operations | 8.9 | 10.7 | 4.2 | 10.2 | 1.4 | 3.6 | 23.9 | 5.1 | 2.7 | |||||||||||||||||||
Balance at end of period | $ | 301.5 | $ | 312.2 | $ | 316.4 | $ | 326.6 | $ | 327.9 | $ | 331.5 | $ | 355.4 | $ | 360.5 | $ | 363.2 | ||||||||||
*First quarter of 2004 reflects the DAC unlocking resulting from the implementation of SOP 03-1. | ||||||||||||||||||||||||||||
** Included in Insurance and Investment Contract Liabilities on the Balance Sheet |
3/31/2006 | PAGE 25 | |||||||||||||||
Life Insurance Segment | ||||||||||||||||
Operational Data | ||||||||||||||||
Unaudited [Millions of Dollars] | ||||||||||||||||
For the Year Ended December 31 | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||
First Year Premiums by Product (Millions) | ||||||||||||||||
Universal Life | ||||||||||||||||
Excluding MoneyGuard | $ | 184.7 | $ | 356.9 | $ | 417.0 | $ | 401.1 | $ | 438.4 | ||||||
MoneyGuard | 107.9 | 138.4 | 224.7 | 244.5 | 226.0 | |||||||||||
Total | 292.7 | 495.3 | 641.6 | 645.6 | 664.4 | |||||||||||
Variable Universal Life | 228.6 | 134.5 | 79.4 | 84.8 | 106.6 | |||||||||||
Whole Life | 26.3 | 30.3 | 34.4 | 41.2 | 40.7 | |||||||||||
Term | 30.8 | 32.3 | 40.2 | 41.0 | 33.8 | |||||||||||
Total Retail | 578.4 | 692.3 | 795.7 | 812.6 | 845.4 | |||||||||||
Corporate Owned Life Insurance (COLI) | 47.3 | 88.1 | 125.6 | 73.7 | 70.5 | |||||||||||
Total | $ | 625.6 | $ | 780.4 | $ | 921.3 | $ | 886.2 | $ | 915.9 | ||||||
First Year Premiums by Distribution (Millions) | ||||||||||||||||
Lincoln Financial Advisors | $ | 196.1 | $ | 201.7 | $ | 223.5 | $ | 209.3 | $ | 183.1 | ||||||
Lincoln Financial Distributors | 413.0 | 556.3 | 631.9 | 623.7 | 676.2 | |||||||||||
Other* | 16.6 | 22.4 | 65.8 | 53.2 | 56.6 | |||||||||||
Total by Distribution | $ | 625.6 | $ | 780.4 | $ | 921.3 | $ | 886.2 | $ | 915.9 | ||||||
Life Insurance In-Force (Billions) | ||||||||||||||||
Universal Life & Other | $ | 121.168 | $ | 126.016 | $ | 129.623 | $ | 132.120 | $ | 136.519 | ||||||
Term Insurance | 113.226 | 127.880 | 151.717 | 172.459 | 187.850 | |||||||||||
Total Life Segment In-Force | $ | 234.394 | $ | 253.896 | $ | 281.340 | $ | 304.579 | $ | 324.369 | ||||||
For the Quarter Ended | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | |||||||||||||||||||||||||
2003 | 2003 | 2003 | 2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | ||||||||||||||||||||||||||
First Year Premiums by Product (Millions) | |||||||||||||||||||||||||||||||||||||
Universal Life | |||||||||||||||||||||||||||||||||||||
Excluding MoneyGuard | $ | 93.8 | $ | 114.2 | $ | 124.5 | $ | 95.7 | $ | 100.7 | $ | 90.1 | $ | 114.5 | $ | 87.1 | $ | 104.1 | $ | 102.9 | $ | 144.4 | $ | 108.6 | |||||||||||||
MoneyGuard | 48.9 | 58.2 | 71.4 | 56.2 | 61.1 | 60.7 | 66.6 | 49.4 | 53.4 | 60.7 | 62.5 | 51.5 | |||||||||||||||||||||||||
Total | 142.7 | 172.3 | 195.9 | 151.9 | 161.8 | 150.8 | 181.1 | 136.4 | 157.4 | 163.6 | 206.9 | 160.1 | |||||||||||||||||||||||||
Variable Universal Life | 14.1 | 16.6 | 24.4 | 22.5 | 17.7 | 17.2 | 27.5 | 25.9 | 23.8 | 23.4 | 33.4 | 27.1 | |||||||||||||||||||||||||
Whole Life | 7.1 | 8.5 | 12.3 | 10.8 | 7.6 | 9.7 | 13.1 | 7.8 | 8.3 | 10.2 | 14.4 | 8.3 | |||||||||||||||||||||||||
Term | 9.6 | 10.5 | 10.9 | 10.5 | 10.6 | 10.4 | 9.4 | 9.2 | 8.6 | 8.0 | 8.0 | 8.3 | |||||||||||||||||||||||||
Total Retail | 173.5 | 208.0 | 243.5 | 195.6 | 197.8 | 188.1 | 231.2 | 179.3 | 198.1 | 205.3 | 262.6 | 203.7 | |||||||||||||||||||||||||
Corporate Owned Life Insurance (COLI) | 61.8 | 23.7 | 29.6 | 14.2 | 9.9 | 29.2 | 20.4 | 24.8 | 10.2 | 22.3 | 13.1 | 19.6 | |||||||||||||||||||||||||
Total | $ | 235.3 | $ | 231.7 | $ | 273.1 | $ | 209.8 | $ | 207.6 | $ | 217.3 | $ | 251.5 | $ | 204.1 | $ | 208.4 | $ | 227.6 | $ | 275.8 | $ | 223.4 | |||||||||||||
First Year Premiums by Distribution (Millions) | |||||||||||||||||||||||||||||||||||||
Lincoln Financial Advisors | $ | 46.8 | $ | 66.2 | $ | 68.5 | $ | 47.7 | $ | 47.2 | $ | 48.2 | $ | 66.1 | $ | 43.1 | $ | 44.3 | $ | 45.6 | $ | 50.1 | $ | 41.5 | |||||||||||||
Lincoln Financial Distributors | 148.3 | 156.8 | 195.2 | 151.4 | 152.9 | 152.0 | 167.4 | 149.7 | 153.5 | 173.0 | 200.0 | 158.2 | |||||||||||||||||||||||||
Other* | 40.2 | 8.7 | 9.4 | 10.6 | 7.5 | 17.1 | 18.0 | 11.3 | 10.6 | 9.0 | 25.7 | 23.7 | |||||||||||||||||||||||||
Total by Distribution | $ | 235.3 | $ | 231.7 | $ | 273.1 | $ | 209.8 | $ | 207.6 | $ | 217.3 | $ | 251.5 | $ | 204.1 | $ | 208.4 | $ | 227.6 | $ | 275.8 | $ | 223.4 | |||||||||||||
Insurance In-Force (Billions) | |||||||||||||||||||||||||||||||||||||
Universal Life & Other | $ | 127.276 | $ | 127.855 | $ | 129.623 | $ | 129.669 | $ | 130.294 | $ | 130.989 | $ | 132.120 | $ | 132.436 | $ | 133.347 | $ | 134.483 | $ | 136.519 | $ | 137.562 | |||||||||||||
Term Insurance | 139.191 | 145.480 | 151.717 | 157.338 | 162.953 | 167.979 | 172.459 | 176.541 | 180.659 | 184.334 | 187.850 | 191.825 | |||||||||||||||||||||||||
Total Segment In-Force | $ | 266.467 | $ | 273.335 | $ | 281.340 | $ | 287.007 | $ | 293.247 | $ | 298.967 | $ | 304.579 | $ | 308.976 | $ | 314.005 | $ | 318.817 | $ | 324.369 | $ | 329.388 | |||||||||||||
*Other consists of distribution arrangements with third-party intermediaries. |
3/31/2006 | PAGE 26 | |||||||||||||||
Life Insurance Segment | ||||||||||||||||
Life Insurance Account Value Rollforward | ||||||||||||||||
Unaudited [Billions of Dollars] | ||||||||||||||||
2001 | 2002 | 2003 | 2004 | 2005 | ||||||||||||
Universal Life-Bal Beg-of-Year | $ | 6.976 | $ | 7.508 | $ | 8.211 | $ | 9.030 | $ | 9.648 | ||||||
Deposits | 1.043 | 1.332 | 1.532 | 1.433 | 1.432 | |||||||||||
Withdrawals & deaths | (0.319 | ) | (0.426 | ) | (0.437 | ) | (0.474 | ) | (0.422 | ) | ||||||
Net flows | 0.724 | 0.906 | 1.095 | 0.959 | 1.010 | |||||||||||
Policyholder assessments | (0.598 | ) | (0.648 | ) | (0.702 | ) | (0.753 | ) | (0.804 | ) | ||||||
Interest credited | 0.405 | 0.428 | 0.427 | 0.413 | 0.418 | |||||||||||
Acq of new business/transfers between segments | - | 0.018 | - | - | - | |||||||||||
Universal Life-Bal End of Year (1) | $ | 7.508 | $ | 8.211 | $ | 9.030 | $ | 9.648 | $ | 10.271 | ||||||
Variable Universal Life-Bal Beg-of-Year | $ | 1.808 | $ | 1.746 | $ | 1.690 | $ | 2.195 | $ | 2.520 | ||||||
Deposits | 0.584 | 0.504 | 0.448 | 0.560 | 0.535 | |||||||||||
Withdrawals & deaths | (0.251 | ) | (0.193 | ) | (0.208 | ) | (0.315 | ) | (0.242 | ) | ||||||
Net flows | 0.332 | 0.311 | 0.240 | 0.245 | 0.294 | |||||||||||
Policyholder assessments | (0.170 | ) | (0.186 | ) | (0.191 | ) | (0.194 | ) | (0.202 | ) | ||||||
Invest inc & chg in mkt value | (0.225 | ) | (0.313 | ) | 0.457 | 0.273 | 0.249 | |||||||||
Acq of new business/transfers between segments | - | 0.132 | - | - | - | |||||||||||
Variable Universal Life -Bal end of year | $ | 1.746 | $ | 1.690 | $ | 2.195 | $ | 2.520 | $ | 2.861 | ||||||
Interest Sensitive Whole Life - Bal Beg-of-Year | $ | 2.062 | $ | 2.123 | $ | 2.186 | $ | 2.195 | $ | 2.214 | ||||||
Deposits | 0.307 | 0.301 | 0.279 | 0.250 | 0.272 | |||||||||||
Withdrawals & deaths | (0.200 | ) | (0.199 | ) | (0.236 | ) | (0.207 | ) | (0.220 | ) | ||||||
Net flows | 0.107 | 0.103 | 0.043 | 0.043 | 0.052 | |||||||||||
Policyholder assessments | (0.164 | ) | (0.167 | ) | (0.159 | ) | (0.149 | ) | (0.176 | ) | ||||||
Interest credited | 0.118 | 0.127 | 0.125 | 0.126 | 0.146 | |||||||||||
Int Sensitive Whole Life-Bal End -of -Year | $ | 2.123 | $ | 2.186 | $ | 2.195 | $ | 2.214 | $ | 2.236 | ||||||
Total Segment- Life Insurance Account Values | ||||||||||||||||
Bal Beg-of-Year | $ | 10.847 | $ | 11.377 | $ | 12.086 | $ | 13.420 | $ | 14.382 | ||||||
Deposits | 1.934 | 2.138 | 2.259 | 2.243 | 2.240 | |||||||||||
Withdrawals & deaths | (0.771 | ) | (0.818 | ) | (0.881 | ) | (0.996 | ) | (0.884 | ) | ||||||
Net flows | 1.163 | 1.320 | 1.377 | 1.247 | 1.356 | |||||||||||
Policyholder assessments | (0.931 | ) | (1.002 | ) | (1.053 | ) | (1.096 | ) | (1.182 | ) | ||||||
Invest inc & change in market value | 0.299 | 0.241 | 1.009 | 0.812 | 0.813 | |||||||||||
Acq of new business/transfers between segments | - | 0.150 | - | - | - | |||||||||||
Total Segment -Bal end of year | $ | 11.377 | $ | 12.086 | $ | 13.420 | $ | 14.382 | $ | 15.368 | ||||||
Life Product Spread Information (2) | ||||||||||||||||
Interest Sensitive Products | ||||||||||||||||
Net investment income (3)(4) | 7.63 | % | 7.30 | % | 6.97 | % | 6.67 | % | 6.32 | % | ||||||
Interest credited to policyholders | 5.86 | % | 5.77 | % | 5.36 | % | 4.85 | % | 4.69 | % | ||||||
Spread (3)(4) | 1.77 | % | 1.53 | % | 1.61 | % | 1.81 | % | 1.63 | % | ||||||
Traditional Products | ||||||||||||||||
Net investment income (3)(4) | 7.49 | % | 7.42 | % | 6.99 | % | 6.90 | % | 6.43 | % | ||||||
(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 2001, 2002, 2003, 2004 and 2005, interest sensitive products represented 86%, 87%, 88%, 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 7 bps in 2005, 20 bps in 2004, 3 bps in 2003, 4 bps in 2002, and 6 bps in 2001. The impact for traditional products was 6 bps in 2005, 18 bps in 2004, 6 bpsin 2003, 5 bps in 2002, and 13 bps in 2001. | ||||||||||||||||
(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. |
3/31/2006 | PAGE 27 | ||||||||||||||||||||||||||||||||||||
Life Insurance Segment | |||||||||||||||||||||||||||||||||||||
Life Insurance Account Value Roll Forward | |||||||||||||||||||||||||||||||||||||
Unaudited [Billions of Dollars] | |||||||||||||||||||||||||||||||||||||
Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | ||||||||||||||||||||||||||
2003 | 2003 | 2003 | 2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | ||||||||||||||||||||||||||
Universal Life-Bal Beg-of-Quarter | $ | 8.359 | $ | 8.542 | $ | 8.782 | $ | 9.030 | $ | 9.175 | $ | 9.308 | $ | 9.444 | $ | 9.648 | $ | 9.764 | $ | 9.902 | $ | 10.053 | $ | 10.271 | |||||||||||||
Deposits | 0.350 | 0.426 | 0.440 | 0.342 | 0.345 | 0.333 | 0.413 | 0.321 | 0.333 | 0.349 | 0.429 | 0.353 | |||||||||||||||||||||||||
Withdrawals & deaths | (0.101 | ) | (0.117 | ) | (0.113 | ) | (0.117 | ) | (0.128 | ) | (0.112 | ) | (0.117 | ) | (0.115 | ) | (0.101 | ) | (0.103 | ) | (0.105 | ) | (0.116 | ) | |||||||||||||
Net flows | 0.249 | 0.309 | 0.327 | 0.225 | 0.217 | 0.221 | 0.296 | 0.207 | 0.233 | 0.246 | 0.324 | 0.236 | |||||||||||||||||||||||||
Policyholder assessments | (0.171 | ) | (0.178 | ) | (0.185 | ) | (0.183 | ) | (0.187 | ) | (0.188 | ) | (0.196 | ) | (0.194 | ) | (0.198 | ) | (0.200 | ) | (0.213 | ) | (0.214 | ) | |||||||||||||
Interest credited | 0.106 | 0.108 | 0.106 | 0.103 | 0.102 | 0.103 | 0.105 | 0.103 | 0.103 | 0.105 | 0.107 | 0.106 | |||||||||||||||||||||||||
Universal Life-Bal End-of-Quarter (1) | $ | 8.542 | $ | 8.782 | $ | 9.030 | $ | 9.175 | $ | 9.308 | $ | 9.444 | $ | 9.648 | $ | 9.764 | $ | 9.902 | $ | 10.053 | $ | 10.271 | $ | 10.400 | |||||||||||||
Variable Universal Life-Bal Beg of Quarter | $ | 1.689 | $ | 1.930 | $ | 1.991 | $ | 2.195 | $ | 2.249 | $ | 2.277 | $ | 2.275 | $ | 2.520 | $ | 2.500 | $ | 2.587 | $ | 2.734 | $ | 2.861 | |||||||||||||
Deposits | 0.114 | 0.093 | 0.123 | 0.106 | 0.108 | 0.156 | 0.192 | 0.130 | 0.131 | 0.138 | 0.136 | 0.133 | |||||||||||||||||||||||||
Withdrawals & deaths | (0.050 | ) | (0.048 | ) | (0.074 | ) | (0.073 | ) | (0.042 | ) | (0.089 | ) | (0.111 | ) | (0.069 | ) | (0.062 | ) | (0.065 | ) | (0.045 | ) | (0.066 | ) | |||||||||||||
Net flows | 0.064 | 0.045 | 0.049 | 0.032 | 0.066 | 0.067 | 0.081 | 0.061 | 0.068 | 0.073 | 0.091 | 0.067 | |||||||||||||||||||||||||
Policyholder assessments | (0.048 | ) | (0.046 | ) | (0.049 | ) | (0.048 | ) | (0.048 | ) | (0.048 | ) | (0.050 | ) | (0.049 | ) | (0.049 | ) | (0.050 | ) | (0.054 | ) | (0.052 | ) | |||||||||||||
Invest inc & chg in mkt value | 0.225 | 0.062 | 0.204 | 0.070 | 0.011 | (0.021 | ) | 0.214 | (0.031 | ) | 0.067 | 0.125 | 0.089 | 0.152 | |||||||||||||||||||||||
Variable Universal Life -Bal End-of-Quarter | $ | 1.930 | $ | 1.991 | $ | 2.195 | $ | 2.249 | $ | 2.277 | $ | 2.275 | $ | 2.520 | $ | 2.500 | $ | 2.587 | $ | 2.734 | $ | 2.861 | $ | 3.028 | |||||||||||||
Interest Sensitive Whole Life - Bal Beg-of-Quarter | $ | 2.185 | $ | 2.191 | $ | 2.185 | $ | 2.195 | $ | 2.182 | $ | 2.185 | $ | 2.193 | $ | 2.214 | $ | 2.201 | $ | 2.202 | $ | 2.213 | $ | 2.236 | |||||||||||||
Deposits | 0.062 | 0.067 | 0.098 | 0.054 | 0.055 | 0.059 | 0.082 | 0.061 | 0.062 | 0.066 | 0.083 | 0.049 | |||||||||||||||||||||||||
Withdrawals & deaths | (0.050 | ) | (0.066 | ) | (0.073 | ) | (0.063 | ) | (0.047 | ) | (0.047 | ) | (0.050 | ) | (0.068 | ) | (0.055 | ) | (0.048 | ) | (0.048 | ) | (0.056 | ) | |||||||||||||
Net flows | 0.012 | 0.001 | 0.026 | (0.009 | ) | 0.008 | 0.012 | 0.032 | (0.007 | ) | 0.007 | 0.018 | 0.035 | (0.006 | ) | ||||||||||||||||||||||
Policyholder assessments | (0.038 | ) | (0.039 | ) | (0.047 | ) | (0.036 | ) | (0.036 | ) | (0.036 | ) | (0.041 | ) | (0.045 | ) | (0.043 | ) | (0.043 | ) | (0.045 | ) | (0.038 | ) | |||||||||||||
Interest credited | 0.032 | 0.032 | 0.031 | 0.032 | 0.031 | 0.032 | 0.030 | 0.039 | 0.037 | 0.036 | 0.034 | 0.034 | |||||||||||||||||||||||||
Int Sensitive Whole Life-Bal End-of-Quarter | $ | 2.191 | $ | 2.185 | $ | 2.195 | $ | 2.182 | $ | 2.185 | $ | 2.193 | $ | 2.214 | $ | 2.201 | $ | 2.202 | $ | 2.213 | $ | 2.236 | $ | 2.227 | |||||||||||||
Total Segment- Life Insurance Account Values | |||||||||||||||||||||||||||||||||||||
Bal Beg-of-Quarter | $ | 12.233 | $ | 12.663 | $ | 12.958 | $ | 13.420 | $ | 13.606 | $ | 13.770 | $ | 13.912 | $ | 14.382 | $ | 14.466 | $ | 14.691 | $ | 15.001 | $ | 15.368 | |||||||||||||
Deposits | 0.526 | 0.586 | 0.661 | 0.501 | 0.507 | 0.548 | 0.686 | 0.512 | 0.527 | 0.553 | 0.648 | 0.535 | |||||||||||||||||||||||||
Withdrawals & deaths | (0.202 | ) | (0.231 | ) | (0.259 | ) | (0.254 | ) | (0.217 | ) | (0.248 | ) | (0.278 | ) | (0.252 | ) | (0.218 | ) | (0.216 | ) | (0.198 | ) | (0.238 | ) | |||||||||||||
Net flows | 0.324 | 0.355 | 0.402 | 0.248 | 0.291 | 0.300 | 0.408 | 0.260 | 0.309 | 0.337 | 0.450 | 0.297 | |||||||||||||||||||||||||
Policyholder assessments | (0.257 | ) | (0.262 | ) | (0.280 | ) | (0.267 | ) | (0.271 | ) | (0.272 | ) | (0.287 | ) | (0.287 | ) | (0.290 | ) | (0.293 | ) | (0.312 | ) | (0.303 | ) | |||||||||||||
Invest inc & change in market value | 0.363 | 0.202 | 0.341 | 0.205 | 0.145 | 0.114 | 0.348 | 0.111 | 0.206 | 0.266 | 0.230 | 0.293 | |||||||||||||||||||||||||
Total Segment -Bal End-of-Quarter | $ | 12.663 | $ | 12.958 | $ | 13.420 | $ | 13.606 | $ | 13.770 | $ | 13.912 | $ | 14.382 | $ | 14.466 | $ | 14.691 | $ | 15.001 | $ | 15.368 | $ | 15.655 | |||||||||||||
Life Product Spread Information (2) | |||||||||||||||||||||||||||||||||||||
Interest Sensitive Products | |||||||||||||||||||||||||||||||||||||
Net investment income (3)(4)(5) | 7.09 | % | 6.90 | % | 6.73 | % | 6.84 | % | 6.70 | % | 6.62 | % | 6.50 | % | 6.32 | % | 6.35 | % | 6.35 | % | 6.26 | % | 6.47 | % | |||||||||||||
Interest credited to policyholders | 5.43 | % | 5.37 | % | 5.12 | % | 4.97 | % | 4.89 | % | 4.79 | % | 4.80 | % | 4.75 | % | 4.65 | % | 4.70 | % | 4.66 | % | 4.64 | % | |||||||||||||
Spread (3)(4) | 1.65 | % | 1.53 | % | 1.61 | % | 1.87 | % | 1.81 | % | 1.83 | % | 1.69 | % | 1.57 | % | 1.71 | % | 1.65 | % | 1.60 | % | 1.83 | % | |||||||||||||
Traditional Products | |||||||||||||||||||||||||||||||||||||
Net investment income (3)(4) | 7.13 | % | 6.99 | % | 6.72 | % | 7.33 | % | 6.61 | % | 6.97 | % | 6.60 | % | 6.43 | % | 6.50 | % | 6.40 | % | 6.36 | % | 6.48 | % | |||||||||||||
(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 March 31, 2006, interest sensitive products represented 89% 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 7 bps in the 1st quarter of 2006, 11 bps in the 4th quarter of 2005, 4 bps in the 3rd quarter of 2005, 12 bps in the 2nd quarter of 2005, 0 bps in the 1st quarter of 2005, 13 bps in the 4th quarter of 2004, 29 bps in the 3rd quarter of 2004, 32 bps in the 2nd quarter of 2004, and 7 bps in the 1st quarter of 2004. There was an impact on traditional products of 6 bps in the 1st quarter of 2006, 0 bps in the 4th quarter of 2005, 6 bps in the 3rd quarter of 2005, 12 bps in the 2nd quarter of 2005, 5 bps in the 1st quarter of 2005, 7 bps in the 4th quarter of 2004, 59 bps in the 3rd quarter of 2004, 5 bps in the 2nd quarter of 2004, and 0 bps in the 1st quarter of 2004. | |||||||||||||||||||||||||||||||||||||
(4) First quarter 2004 includes income from contingent interest received, which contributed $6.5 million to net investment income or 25 bps to the yield and spread on Interest Sensitive Products and $2.4 million to net investment income or 72 bps to the yield and spread on Traditional Products. | |||||||||||||||||||||||||||||||||||||
(5) The net investment income and spread for the first quarter of 2006 includes 17 basis points of incremental yield from special investments. |
3/31/2006 | PAGE 28 | |||||||||||||||
Investment Management | ||||||||||||||||
Income Statements | ||||||||||||||||
Unaudited [Millions of Dollars] | ||||||||||||||||
For the Year Ended December 31 | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||
Operating Revenue | ||||||||||||||||
Investment advisory fees - External | $ | 197.2 | $ | 183.3 | $ | 205.0 | $ | 252.5 | $ | 279.0 | ||||||
Investment advisory fees - Insurance-related assets | 105.0 | 97.7 | 101.2 | 105.8 | 98.8 | |||||||||||
Other revenue and fees | 51.7 | 46.5 | 72.8 | 66.2 | 65.8 | |||||||||||
Surrender charges | 2.2 | 2.4 | 2.3 | 1.9 | 2.3 | |||||||||||
Expense assessments | 45.3 | 38.1 | 42.8 | 56.8 | 68.9 | |||||||||||
Net investment income | 53.6 | 50.5 | 49.9 | 51.7 | 53.0 | |||||||||||
Operating Revenue | 454.9 | 418.5 | 474.0 | 534.9 | 567.8 | |||||||||||
Operating Expenses | ||||||||||||||||
Interest credited to policy bal. | 38.7 | 31.3 | 26.4 | 26.9 | 27.9 | |||||||||||
Underwriting, acquisition, | ||||||||||||||||
insurance and other expenses: | ||||||||||||||||
Commissions and other volume-related expenses | 31.6 | 35.5 | 42.2 | 53.0 | 60.1 | |||||||||||
Operating and administrative expenses | 344.6 | 335.5 | 368.7 | 392.9 | 430.3 | |||||||||||
DAC deferral net of amortization | (4.7 | ) | (9.2 | ) | (22.8 | ) | (27.1 | ) | (19.8 | ) | ||||||
Taxes, licenses and fees | 16.8 | 13.0 | 10.3 | 17.0 | 10.7 | |||||||||||
Subtotal | 388.2 | 374.9 | 398.4 | 435.8 | 481.2 | |||||||||||
Other intangibles amortization | 10.8 | 8.2 | 7.9 | 9.7 | 7.8 | |||||||||||
Total underwriting, acquisition, | ||||||||||||||||
insurance and other expenses | 399.0 | 383.2 | 406.3 | 445.5 | 489.0 | |||||||||||
Goodwill amortization | 16.2 | - | - | - | - | |||||||||||
Total Operating Expenses | 454.0 | 414.4 | 432.7 | 472.5 | 516.9 | |||||||||||
Operating income before federal taxes | 0.9 | 4.1 | 41.3 | 62.4 | 50.9 | |||||||||||
Federal income taxes | 7.0 | 2.2 | 6.8 | 18.9 | 14.9 | |||||||||||
Income (Loss) from Operations | $ | (6.1 | ) | $ | 1.8 | $ | 34.5 | $ | 43.6 | $ | 36.0 | |||||
Effective tax rate | NM | 54.8 | % | 16.5 | % | 30.2 | % | 29.3 | % | |||||||
Average capital (securities at cost) | $ | 557.0 | $ | 581.2 | $ | 602.4 | $ | 610.9 | $ | 544.9 | ||||||
Return on average capital | (1.1 | %) | 0.3 | % | 5.7 | % | 7.1 | % | 6.6 | % | ||||||
Roll Forward of Deferred Acquisition Costs | ||||||||||||||||
Balance at beginning of period | $ | 81.1 | $ | 85.6 | $ | 90.8 | $ | 91.8 | $ | 120.4 | ||||||
Deferral | 35.6 | 42.0 | 42.0 | 51.4 | 48.2 | |||||||||||
Amortization | (30.8 | ) | (32.9 | ) | (19.2 | ) | (24.3 | ) | (28.3 | ) | ||||||
Included in Total Benefits and Expenses | 4.7 | 9.2 | 22.8 | 27.1 | 19.8 | |||||||||||
Adjustment related to realized (gains) losses | ||||||||||||||||
on available-for-sale securities | 1.6 | 2.3 | 0.5 | (1.3 | ) | (0.4 | ) | |||||||||
Adjustment related to unrealized (gains) losses | ||||||||||||||||
on available-for-sale securities | (1.8 | ) | (6.3 | ) | (22.2 | ) | 2.7 | 14.6 | ||||||||
Balance at end of period | $ | 85.6 | $ | 90.8 | $ | 91.8 | $ | 120.4 | $ | 154.5 |
3/31/2006 | PAGE 29 | |||||||||||||||||||||||||||
Investment Management | ||||||||||||||||||||||||||||
Income Statements | ||||||||||||||||||||||||||||
Unaudited [Millions of Dollars] | ||||||||||||||||||||||||||||
For the Quarter Ended | Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | |||||||||||||||||||
2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | ||||||||||||||||||||
Operating Revenue | ||||||||||||||||||||||||||||
Investment advisory fees - External | $ | 62.7 | $ | 66.4 | $ | 67.4 | $ | 56.0 | $ | 59.4 | $ | 66.9 | $ | 73.6 | $ | 79.0 | $ | 84.9 | ||||||||||
Investment advisory fees - Insurance-related assets | 26.5 | 26.1 | 26.4 | 26.8 | 24.8 | 24.6 | 24.9 | 24.5 | 25.1 | |||||||||||||||||||
Other revenue and fees | 19.1 | 16.7 | 13.7 | 16.7 | 16.0 | 14.9 | 17.1 | 17.8 | 19.1 | |||||||||||||||||||
Surrender charges | 0.5 | 0.5 | 0.4 | 0.5 | 0.7 | 0.5 | 0.6 | 0.5 | 0.8 | |||||||||||||||||||
Expense assessments | 14.1 | 14.7 | 12.5 | 15.5 | 16.6 | 16.8 | 17.9 | 17.6 | 19.8 | |||||||||||||||||||
Net investment income | 12.2 | 14.6 | 12.7 | 12.3 | 12.9 | 14.2 | 12.7 | 13.2 | 12.9 | |||||||||||||||||||
Operating Revenue | 135.2 | 139.0 | 133.0 | 127.7 | 130.4 | 138.0 | 146.8 | 152.7 | 162.6 | |||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||||
Interest credited to policy bal. | 6.6 | 6.7 | 6.9 | 6.8 | 6.8 | 7.0 | 7.0 | 7.1 | 7.1 | |||||||||||||||||||
Underwriting, acquisition, | ||||||||||||||||||||||||||||
insurance and other expenses: | ||||||||||||||||||||||||||||
Commissions and other volume-related expenses | 14.0 | 14.4 | 12.9 | 11.7 | 14.8 | 13.0 | 16.4 | 15.9 | 16.7 | |||||||||||||||||||
Operating and administrative expenses | 96.1 | 98.5 | 98.1 | 100.2 | 96.4 | 111.5 | 112.8 | 109.5 | 104.5 | |||||||||||||||||||
DAC deferral net of amortization | (5.6 | ) | (8.1 | ) | (9.5 | ) | (3.9 | ) | (3.3 | ) | (2.7 | ) | (9.9 | ) | (3.9 | ) | (2.7 | ) | ||||||||||
Taxes, licenses and fees | 3.9 | 5.5 | 4.6 | 3.1 | 3.0 | 2.3 | 2.7 | 2.8 | 4.8 | |||||||||||||||||||
Subtotal | 108.5 | 110.3 | 106.0 | 111.0 | 110.9 | 124.1 | 122.0 | 124.2 | 123.3 | |||||||||||||||||||
Other intangibles amortization | 2.0 | 2.0 | 2.0 | 3.8 | 1.9 | 1.9 | 2.0 | 2.0 | 2.0 | |||||||||||||||||||
Total underwriting, acquisition, | ||||||||||||||||||||||||||||
insurance and other expenses | 110.4 | 112.3 | 108.0 | 114.8 | 112.8 | 126.0 | 124.0 | 126.2 | 125.2 | |||||||||||||||||||
Total Operating Expenses | 117.0 | 118.9 | 114.8 | 121.7 | 119.6 | 133.0 | 131.0 | 133.3 | 132.3 | |||||||||||||||||||
Operating income before federal taxes | 18.2 | 20.1 | 18.2 | 6.0 | 10.7 | 5.0 | 15.7 | 19.4 | 30.3 | |||||||||||||||||||
Federal income taxes | 5.6 | 6.7 | 5.7 | 0.8 | 3.3 | 1.2 | 5.6 | 4.8 | 10.0 | |||||||||||||||||||
Income from Operations | $ | 12.5 | $ | 13.4 | $ | 12.5 | $ | 5.2 | $ | 7.4 | $ | 3.9 | $ | 10.2 | $ | 14.6 | $ | 20.3 | ||||||||||
Effective tax rate | 31.1 | % | 33.4 | % | 31.3 | % | 13.6 | % | 31.2 | % | 23.1 | % | 35.4 | % | 24.9 | % | 33.0 | % | ||||||||||
Average capital (securities at cost) | $ | 634.2 | $ | 634.8 | $ | 627.2 | $ | 547.3 | $ | 548.0 | $ | 542.5 | $ | 540.1 | $ | 549.0 | $ | 543.5 | ||||||||||
Return on average capital | 7.9 | % | 8.4 | % | 8.0 | % | 3.8 | % | 5.4 | % | 2.8 | % | 7.5 | % | 10.6 | % | 14.9 | % | ||||||||||
Roll Forward of Deferred Acquisition Costs | ||||||||||||||||||||||||||||
Balance at beginning of period | $ | 91.8 | $ | 84.2 | $ | 120.1 | $ | 115.3 | $ | 120.4 | $ | 133.8 | $ | 126.7 | $ | 146.2 | $ | 154.5 | ||||||||||
Deferral | 11.7 | 13.4 | 12.5 | 13.8 | 12.2 | 10.6 | 12.8 | 12.6 | 13.3 | |||||||||||||||||||
Amortization | (6.1 | ) | (5.3 | ) | (3.0 | ) | (10.0 | ) | (8.9 | ) | (7.8 | ) | (2.9 | ) | (8.6 | ) | (10.6 | ) | ||||||||||
Included in Total Benefits and Expenses | 5.6 | 8.1 | 9.5 | 3.9 | 3.3 | 2.7 | 9.9 | 3.9 | 2.7 | |||||||||||||||||||
Adjustment related to realized (gains) losses | ||||||||||||||||||||||||||||
on available-for-sale securities | (3.6 | ) | 2.4 | 0.4 | (0.5 | ) | 0.4 | (0.0 | ) | (0.4 | ) | (0.4 | ) | (0.3 | ) | |||||||||||||
Adjustment related to unrealized (gains) losses | ||||||||||||||||||||||||||||
on available-for-sale securities | (9.6 | ) | 25.4 | (14.8 | ) | 1.7 | 9.8 | (9.9 | ) | 9.9 | 4.8 | 9.7 | ||||||||||||||||
Balance at end of period | $ | 84.2 | $ | 120.1 | $ | 115.3 | $ | 120.4 | $ | 133.8 | $ | 126.7 | $ | 146.2 | $ | 154.5 | $ | 166.5 |
3/31/2006 | PAGE 30 | |||||||||||||||
Investment Management | ||||||||||||||||
Assets Under Management Rollforward | ||||||||||||||||
Unaudited [Billions of Dollars] | ||||||||||||||||
2001 | 2002 | 2003 | 2004 | 2005 | ||||||||||||
Retail Fixed - Bal Beg-of-Period | $ | 6.605 | $ | 7.118 | $ | 7.631 | $ | 8.186 | $ | 8.257 | ||||||
Fund Sales | 0.876 | 1.218 | 1.792 | 1.882 | 2.483 | |||||||||||
Redemptions | (1.051 | ) | (1.182 | ) | (1.442 | ) | (1.520 | ) | (1.476 | ) | ||||||
Net Money Market | (0.046 | ) | (0.050 | ) | (0.028 | ) | (0.113 | ) | (0.060 | ) | ||||||
Transfers | 0.405 | 0.206 | (0.168 | ) | (0.212 | ) | (0.082 | ) | ||||||||
Net Flows | 0.184 | 0.192 | 0.154 | 0.037 | 0.865 | |||||||||||
Market | 0.330 | 0.321 | 0.401 | 0.290 | 0.079 | |||||||||||
Transfer of Assets Under Administration(1) | - | - | - | (0.256 | ) | (0.001 | ) | |||||||||
Balance end of period | $ | 7.118 | $ | 7.631 | $ | 8.186 | $ | 8.257 | $ | 9.199 | ||||||
Retail Equity - Bal Beg-of-Period | $ | 21.525 | $ | 17.990 | $ | 14.917 | $ | 20.887 | $ | 26.130 | ||||||
Fund Sales | 2.817 | 4.477 | 3.791 | 7.110 | 11.573 | |||||||||||
Redemptions | (2.838 | ) | (3.690 | ) | (2.830 | ) | (4.054 | ) | (5.138 | ) | ||||||
Transfers | (0.538 | ) | (0.173 | ) | 0.156 | 0.042 | (0.203 | ) | ||||||||
Net Flows | (0.560 | ) | 0.614 | 1.117 | 3.099 | 6.233 | ||||||||||
Market | (2.975 | ) | (3.688 | ) | 4.854 | 3.256 | 3.114 | |||||||||
Sale of subsidiary/Transfer of Assets Under | ||||||||||||||||
Administration (1) (2) | - | - | - | (1.112 | ) | (0.003 | ) | |||||||||
Balance at end of period | $ | 17.990 | $ | 14.917 | $ | 20.887 | $ | 26.130 | $ | 35.474 | ||||||
Total Retail - Bal Beg-of-Period | $ | 28.130 | $ | 25.108 | $ | 22.547 | $ | 29.073 | $ | 34.387 | ||||||
Retail Sales-Annuities | 1.701 | 2.751 | 2.151 | 2.757 | 2.957 | |||||||||||
Retail Sales-Mutual Funds | 1.523 | 1.829 | 2.315 | 3.235 | 4.860 | |||||||||||
Retail Sales-Managed Acct. & Other | 0.469 | 1.115 | 1.116 | 2.999 | 6.239 | |||||||||||
Total Retail Sales | 3.693 | 5.695 | 5.583 | 8.992 | 14.056 | |||||||||||
Redemptions | (3.889 | ) | (4.873 | ) | (4.272 | ) | (5.574 | ) | (6.613 | ) | ||||||
Net Money Market | (0.046 | ) | (0.050 | ) | (0.028 | ) | (0.113 | ) | (0.060 | ) | ||||||
Transfers | (0.133 | ) | 0.033 | (0.012 | ) | (0.170 | ) | (0.285 | ) | |||||||
Net Flows | (0.375 | ) | 0.806 | 1.271 | 3.136 | 7.098 | ||||||||||
Market | (2.646 | ) | (3.366 | ) | 5.255 | 3.546 | 3.193 | |||||||||
Sale of subsidiary/Transfer of Assets Under | ||||||||||||||||
Administration (1) (2) | - | - | - | (1.368 | ) | (0.004 | ) | |||||||||
Balance at end of period(1) (2) | $ | 25.108 | $ | 22.547 | $ | 29.073 | $ | 34.387 | $ | 44.673 | ||||||
Institutional Fixed - Bal Beg-of-Period | $ | 6.111 | $ | 5.489 | $ | 7.237 | $ | 8.399 | $ | 9.960 | ||||||
Inflows | 0.643 | 2.281 | 1.937 | 5.134 | 4.277 | |||||||||||
Withdrawals/Terminations | (1.229 | ) | (1.146 | ) | (1.226 | ) | (0.593 | ) | (1.300 | ) | ||||||
Transfers | 0.017 | 0.004 | 0.005 | 0.009 | 0.000 | |||||||||||
Net Flows (2) | (0.569 | ) | 1.139 | 0.716 | 4.549 | 2.977 | ||||||||||
Market | (0.053 | ) | 0.608 | 0.447 | 0.135 | 0.104 | ||||||||||
Sale of Subsidiary (2) | - | - | - | (3.124 | ) | - | ||||||||||
Balance at end of period (2) | $ | 5.489 | $ | 7.237 | $ | 8.399 | $ | 9.960 | $ | 13.042 | ||||||
Institutional Equity - Bal Beg-of-Period | $ | 19.114 | $ | 17.815 | $ | 16.711 | $ | 25.322 | $ | 11.682 | ||||||
Inflows | 3.183 | 2.913 | 3.922 | 6.155 | 10.356 | |||||||||||
Withdrawals/Terminations | (2.879 | ) | (1.991 | ) | (2.178 | ) | (3.583 | ) | (4.520 | ) | ||||||
Transfers | 0.035 | 0.045 | 0.018 | 0.057 | 0.048 | |||||||||||
Net Flows | 0.338 | 0.967 | 1.762 | 2.629 | 5.884 | |||||||||||
Market | (1.637 | ) | (2.071 | ) | 6.849 | 2.394 | 1.813 | |||||||||
Sale of Subsidiary (2) | - | - | - | (18.664 | ) | - | ||||||||||
Balance at end of period | $ | 17.815 | $ | 16.711 | $ | 25.322 | $ | 11.682 | $ | 19.379 | ||||||
Total Institutional - Bal Beg-of-Period | $ | 25.225 | $ | 23.305 | $ | 23.948 | $ | 33.722 | $ | 21.643 | ||||||
Inflows | 3.826 | 5.194 | 5.859 | 11.289 | 14.633 | |||||||||||
Withdrawals/Terminations | (4.109 | ) | (3.137 | ) | (3.404 | ) | (4.176 | ) | (5.820 | ) | ||||||
Transfers | 0.052 | 0.050 | 0.023 | 0.066 | 0.048 | |||||||||||
Net Flows | (0.231 | ) | 2.106 | 2.478 | 7.178 | 8.861 | ||||||||||
Market | (1.690 | ) | (1.463 | ) | 7.296 | 2.530 | 1.917 | |||||||||
Sale of Subsidiary (2) | - | - | - | (21.787 | ) | - | ||||||||||
Balance at end of period | $ | 23.305 | $ | 23.948 | $ | 33.722 | $ | 21.643 | $ | 32.420 | ||||||
Total Retail/Institutional - At end of period | $ | 48.412 | $ | 46.495 | $ | 62.794 | $ | 56.029 | $ | 77.093 | ||||||
Insurance-related Assets - At end of period | $ | 38.119 | $ | 41.104 | $ | 43.024 | $ | 43.980 | $ | 44.483 | ||||||
Total Retail/Inst - Net Flows | $ | (0.606 | ) | $ | 2.912 | $ | 3.749 | $ | 10.314 | $ | 15.959 | |||||
Total Assets Under Management | ||||||||||||||||
At end of period | $ | 86.531 | $ | 87.599 | $ | 105.818 | $ | 100.009 | $ | 121.576 | ||||||
Subadvised Assets, included in Assets Under Management above | ||||||||||||||||
Retail | $ | 3.330 | $ | 2.460 | $ | 3.750 | $ | 10.740 | $ | 17.162 | ||||||
Institutional | 0.030 | 0.020 | 0.030 | 3.740 | 4.782 | |||||||||||
Total Subadvised Assets | $ | 3.360 | $ | 2.480 | $ | 3.780 | $ | 14.480 | $ | 21.945 | ||||||
(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, 2004 had net outflows of assets under management of approximately $1.052 billion. | ||||||||||||||||
(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 30A 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. |
3/31/2006 | PAGE 30A | |||||||||||||||
Investment Management (excluding Assets Managed by | ||||||||||||||||
Delaware's London-based International Investment Unit) | ||||||||||||||||
Assets Under Management Rollforward | ||||||||||||||||
Unaudited [Billions of Dollars] | ||||||||||||||||
2001 | 2002 | 2003 | 2004 | 2005 | ||||||||||||
Retail Fixed - Bal Beg-of-Period | $ | 6.604 | $ | 7.118 | $ | 7.631 | $ | 8.186 | $ | 8.257 | ||||||
Fund Sales | 0.876 | 1.218 | 1.792 | 1.882 | 2.483 | |||||||||||
Redemptions | (1.051 | ) | (1.182 | ) | (1.442 | ) | (1.520 | ) | (1.476 | ) | ||||||
Net Money Market | (0.046 | ) | (0.050 | ) | (0.028 | ) | (0.113 | ) | (0.060 | ) | ||||||
Transfers | 0.405 | 0.206 | (0.168 | ) | (0.212 | ) | (0.082 | ) | ||||||||
Net Flows | 0.184 | 0.192 | 0.154 | 0.037 | 0.865 | |||||||||||
Market | 0.330 | 0.321 | 0.401 | 0.290 | 0.079 | |||||||||||
Transfer of Assets Under Administration (1) | - | - | - | (0.256 | ) | (0.001 | ) | |||||||||
Balance end of period | $ | 7.118 | $ | 7.631 | $ | 8.186 | $ | 8.257 | $ | 9.199 | ||||||
Retail Equity - Bal Beg-of-Period | $ | 21.525 | $ | 17.990 | $ | 14.624 | $ | 20.564 | $ | 26.130 | ||||||
Fund Sales | 2.817 | 4.182 | 3.780 | 7.105 | 11.573 | |||||||||||
Redemptions | (2.838 | ) | (3.684 | ) | (2.765 | ) | (4.024 | ) | (5.138 | ) | ||||||
Transfers | (0.538 | ) | (0.173 | ) | 0.156 | 0.042 | (0.203 | ) | ||||||||
Net Flows | (0.560 | ) | 0.325 | 1.171 | 3.123 | 6.233 | ||||||||||
Market | (2.975 | ) | (3.691 | ) | 4.769 | 3.236 | 3.114 | |||||||||
Transfer of Assets Under Administration (1) | - | - | - | (0.793 | ) | (0.003 | ) | |||||||||
Balance at end of period | $ | 17.990 | $ | 14.624 | $ | 20.564 | $ | 26.130 | $ | 35.474 | ||||||
Total Retail - Bal Beg-of-Period | $ | 28.129 | $ | 25.108 | $ | 22.255 | $ | 28.750 | $ | 34.387 | ||||||
Retail Sales-Annuities | 1.701 | 2.456 | 2.140 | 2.752 | 2.957 | |||||||||||
Retail Sales-Mutual Funds | 1.523 | 1.829 | 2.315 | 3.235 | 4.860 | |||||||||||
Retail Sales-Managed Acct. & Other | 0.469 | 1.115 | 1.116 | 2.999 | 6.239 | |||||||||||
Total Retail Sales | 3.693 | 5.399 | 5.572 | 8.987 | 14.056 | |||||||||||
Redemptions | (3.889 | ) | (4.867 | ) | (4.207 | ) | (5.544 | ) | (6.613 | ) | ||||||
Net Money Market | (0.046 | ) | (0.050 | ) | (0.028 | ) | (0.113 | ) | (0.060 | ) | ||||||
Transfers | (0.133 | ) | 0.033 | (0.012 | ) | (0.170 | ) | (0.285 | ) | |||||||
Net Flows | (0.375 | ) | 0.517 | 1.325 | 3.160 | 7.098 | ||||||||||
Market | (2.646 | ) | (3.370 | ) | 5.171 | 3.526 | 3.193 | |||||||||
Transfer of Assets Under Administration (1) | - | - | - | (1.049 | ) | (0.004 | ) | |||||||||
Balance at end of period | $ | 25.108 | $ | 22.255 | $ | 28.750 | $ | 34.387 | $ | 44.673 | ||||||
Institutional Fixed - Bal Beg-of-Period | $ | 3.590 | $ | 3.377 | $ | 5.147 | $ | 5.981 | $ | 9.960 | ||||||
Inflows | 0.388 | 2.177 | 1.540 | 4.356 | 4.277 | |||||||||||
Withdrawals/Terminations | (0.586 | ) | (0.541 | ) | (0.635 | ) | (0.452 | ) | (1.300 | ) | ||||||
Transfers | 0.017 | 0.004 | (0.126 | ) | 0.009 | 0.000 | ||||||||||
Net Flows | (0.181 | ) | 1.640 | 0.779 | 3.913 | 2.977 | ||||||||||
Market | (0.032 | ) | 0.130 | 0.055 | 0.067 | 0.104 | ||||||||||
Balance at end of period | $ | 3.377 | $ | 5.147 | $ | 5.981 | $ | 9.960 | $ | 13.042 | ||||||
Institutional Equity - Bal Beg-of-Period | $ | 9.664 | $ | 8.185 | $ | 7.201 | $ | 10.318 | $ | 11.682 | ||||||
Inflows | 1.555 | 1.532 | 1.780 | 2.281 | 10.356 | |||||||||||
Withdrawals/Terminations | (2.334 | ) | (1.333 | ) | (1.161 | ) | (2.428 | ) | (4.520 | ) | ||||||
Transfers | 0.035 | 0.045 | 0.034 | 0.118 | 0.048 | |||||||||||
Net Flows | (0.744 | ) | 0.245 | 0.653 | (0.029 | ) | 5.884 | |||||||||
Market | (0.735 | ) | (1.229 | ) | 2.463 | 1.393 | 1.813 | |||||||||
Balance at end of period | $ | 8.185 | $ | 7.201 | $ | 10.318 | $ | 11.682 | $ | 19.379 | ||||||
Total Institutional - Bal Beg-of-Period | $ | 13.255 | $ | 11.562 | $ | 12.348 | $ | 16.299 | $ | 21.643 | ||||||
Inflows | 1.943 | 3.709 | 3.320 | 6.637 | 14.633 | |||||||||||
Withdrawals/Terminations | (2.920 | ) | (1.874 | ) | (1.796 | ) | (2.880 | ) | (5.820 | ) | ||||||
Transfers | 0.052 | 0.050 | (0.092 | ) | 0.127 | 0.048 | ||||||||||
Net Flows | (0.925 | ) | 1.885 | 1.433 | 3.884 | 8.861 | ||||||||||
Market | (0.767 | ) | (1.099 | ) | 2.518 | 1.459 | 1.917 | |||||||||
Balance at end of period | $ | 11.562 | $ | 12.348 | $ | 16.299 | $ | 21.643 | $ | 32.420 | ||||||
Total Retail/Institutional - At end of period | $ | 36.670 | $ | 34.603 | $ | 45.049 | $ | 56.029 | $ | 77.093 | ||||||
Insurance-related Assets - At end of period | $ | 38.119 | $ | 41.104 | $ | 43.024 | $ | 43.980 | $ | 44.483 | ||||||
Total Retail/Inst - Net Flows | $ | (1.301 | ) | $ | 2.402 | $ | 2.757 | $ | 7.045 | $ | 15.959 | |||||
Total Assets Under Management | ||||||||||||||||
At end of period | $ | 74.789 | $ | 75.707 | $ | 88.072 | $ | 100.009 | $ | 121.576 | ||||||
Subadvised Assets, included in Assets Under Management above | ||||||||||||||||
Retail | $ | 3.330 | $ | 2.460 | $ | 3.750 | $ | 10.740 | $ | 17.162 | ||||||
Institutional | 0.030 | 0.020 | 0.030 | 3.740 | 4.782 | |||||||||||
Total Subadvised Assets | $ | 3.360 | $ | 2.480 | $ | 3.780 | $ | 14.480 | $ | 21.945 | ||||||
(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, 2004 had net outflows of assets under management of approximately $1.052 billion. | ||||||||||||||||
(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. |
3/31/2006 | PAGE 31 | ||||||||||||||||||||||||||||||||||||
Investment Management | |||||||||||||||||||||||||||||||||||||
Assets Under Management Roll Forward | |||||||||||||||||||||||||||||||||||||
Unaudited [Billions of Dollars] | |||||||||||||||||||||||||||||||||||||
Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | ||||||||||||||||||||||||||
2003 | 2003 | 2003 | 2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | ||||||||||||||||||||||||||
Retail Fixed - Bal-Beg-of-Qtr | $ | 7.907 | $ | 8.190 | $ | 8.083 | $ | 8.186 | $ | 8.313 | $ | 8.152 | $ | 8.060 | $ | 8.257 | $ | 8.501 | $ | 8.823 | $ | 9.061 | $ | 9.199 | |||||||||||||
Fund Sales | 0.469 | 0.443 | 0.456 | 0.513 | 0.452 | 0.425 | 0.493 | 0.608 | 0.612 | 0.602 | 0.661 | 0.597 | |||||||||||||||||||||||||
Redemptions | (0.318 | ) | (0.435 | ) | (0.361 | ) | (0.418 | ) | (0.462 | ) | (0.341 | ) | (0.299 | ) | (0.373 | ) | (0.325 | ) | (0.346 | ) | (0.432 | ) | (0.475 | ) | |||||||||||||
Net Money Market | (0.006 | ) | (0.008 | ) | (0.014 | ) | (0.036 | ) | 0.012 | (0.069 | ) | (0.020 | ) | (0.026 | ) | (0.015 | ) | (0.010 | ) | (0.010 | ) | (0.043 | ) | ||||||||||||||
Transfers | (0.055 | ) | (0.086 | ) | (0.088 | ) | (0.035 | ) | (0.019 | ) | (0.119 | ) | (0.040 | ) | 0.104 | (0.107 | ) | 0.023 | (0.102 | ) | 0.034 | ||||||||||||||||
Net Flows | 0.090 | (0.087 | ) | (0.008 | ) | 0.024 | (0.017 | ) | (0.104 | ) | 0.134 | 0.314 | 0.166 | 0.268 | 0.117 | 0.113 | |||||||||||||||||||||
Market | 0.193 | (0.020 | ) | 0.111 | 0.103 | (0.144 | ) | 0.207 | 0.125 | (0.068 | ) | 0.156 | (0.030 | ) | 0.021 | 0.022 | |||||||||||||||||||||
Transfer of Assets Under Administration(1) | (0.194 | ) | (0.062 | ) | (0.001 | ) | - | - | - | - | |||||||||||||||||||||||||||
Balance at End-of-Qtr | $ | 8.190 | $ | 8.083 | $ | 8.186 | $ | 8.313 | $ | 8.152 | $ | 8.060 | $ | 8.257 | $ | 8.501 | $ | 8.823 | $ | 9.061 | $ | 9.199 | $ | 9.334 | |||||||||||||
Retail Equity - Bal-Beg-of-Qtr | $ | 14.286 | $ | 16.906 | $ | 17.961 | $ | 20.887 | $ | 22.546 | $ | 23.223 | $ | 22.620 | $ | 26.130 | $ | 26.970 | $ | 29.898 | $ | 33.449 | $ | 35.474 | |||||||||||||
Fund Sales | 0.813 | 1.051 | 1.210 | 1.938 | 1.666 | 1.480 | 2.026 | 2.773 | 3.421 | 2.882 | 2.497 | 3.184 | |||||||||||||||||||||||||
Redemptions | (0.612 | ) | (0.706 | ) | (0.710 | ) | (0.992 | ) | (1.028 | ) | (1.081 | ) | (0.953 | ) | (1.325 | ) | (1.305 | ) | (1.198 | ) | (1.310 | ) | (1.762 | ) | |||||||||||||
Transfers | 0.011 | 0.112 | 0.092 | (0.002 | ) | (0.004 | ) | 0.085 | (0.037 | ) | (0.183 | ) | 0.049 | (0.111 | ) | 0.042 | (0.083 | ) | |||||||||||||||||||
Net Flows | 0.213 | 0.457 | 0.592 | 0.944 | 0.634 | 0.485 | 1.036 | 1.265 | 2.166 | 1.573 | 1.229 | 1.339 | |||||||||||||||||||||||||
Market | 2.408 | 0.598 | 2.334 | 0.715 | 0.044 | (0.188 | ) | 2.685 | (0.423 | ) | 0.763 | 1.979 | 0.796 | 2.677 | |||||||||||||||||||||||
Sale of Subsidiary/Transfer of Assets Under | |||||||||||||||||||||||||||||||||||||
Administration (1) (2) | - | - | - | - | - | (0.901 | ) | (0.211 | ) | (0.003 | ) | - | - | - | - | ||||||||||||||||||||||
Balance at End-of-Qtr | $ | 16.906 | $ | 17.961 | $ | 20.887 | $ | 22.546 | $ | 23.223 | $ | 22.620 | $ | 26.130 | $ | 26.970 | $ | 29.898 | $ | 33.449 | $ | 35.474 | $ | 39.490 | |||||||||||||
Total Retail - Bal-Beg-of-Qtr | $ | 22.193 | $ | 25.096 | $ | 26.044 | $ | 29.073 | $ | 30.859 | $ | 31.375 | $ | 30.680 | $ | 34.387 | $ | 35.471 | $ | 38.720 | $ | 42.509 | $ | 44.673 | |||||||||||||
Retail Sales-Annuities | 0.528 | 0.573 | 0.562 | 0.753 | 0.668 | 0.600 | 0.737 | 0.735 | 0.655 | 0.752 | 0.815 | 0.918 | |||||||||||||||||||||||||
Retail Sales-Mutual Funds | 0.558 | 0.644 | 0.663 | 0.905 | 0.729 | 0.680 | 0.922 | 1.336 | 1.255 | 1.159 | 1.110 | 1.094 | |||||||||||||||||||||||||
Retail Sales-Managed Acct. & Other | 0.196 | 0.277 | 0.441 | 0.793 | 0.721 | 0.625 | 0.860 | 1.310 | 2.123 | 1.573 | 1.232 | 1.769 | |||||||||||||||||||||||||
Total Retail Sales | 1.282 | 1.494 | 1.666 | 2.451 | 2.117 | 1.905 | 2.519 | 3.381 | 4.034 | 3.484 | 3.158 | 3.781 | |||||||||||||||||||||||||
Redemptions | (0.930 | ) | (1.141 | ) | (1.071 | ) | (1.409 | ) | (1.491 | ) | (1.422 | ) | (1.252 | ) | (1.697 | ) | (1.630 | ) | (1.545 | ) | (1.741 | ) | (2.237 | ) | |||||||||||||
Net Money Market | (0.006 | ) | (0.008 | ) | (0.014 | ) | (0.036 | ) | 0.012 | (0.069 | ) | (0.020 | ) | (0.026 | ) | (0.015 | ) | (0.010 | ) | (0.010 | ) | (0.043 | ) | ||||||||||||||
Transfers | (0.044 | ) | 0.025 | 0.004 | (0.037 | ) | (0.022 | ) | (0.034 | ) | (0.077 | ) | (0.079 | ) | (0.058 | ) | (0.089 | ) | (0.060 | ) | (0.049 | ) | |||||||||||||||
Net Flows | 0.302 | 0.370 | 0.584 | 0.969 | 0.617 | 0.381 | 1.170 | 1.579 | 2.331 | 1.841 | 1.347 | 1.452 | |||||||||||||||||||||||||
Market | 2.601 | 0.578 | 2.444 | 0.818 | (0.101 | ) | 0.019 | 2.810 | (0.491 | ) | 0.919 | 1.948 | 0.817 | 2.699 | |||||||||||||||||||||||
Sale of Subsidiary/Transfer of Assets Under | |||||||||||||||||||||||||||||||||||||
Administration (1) (2) | - | - | - | - | - | (1.095 | ) | (0.273 | ) | (0.004 | ) | - | - | - | - | ||||||||||||||||||||||
Balance at End-of-Qtr | $ | 25.096 | $ | 26.044 | $ | 29.073 | $ | 30.859 | $ | 31.375 | $ | 30.680 | $ | 34.387 | $ | 35.471 | $ | 38.720 | $ | 42.509 | $ | 44.673 | $ | 48.824 | |||||||||||||
Institutional Fixed - Bal-Beg-of-Qtr | $ | 7.605 | $ | 7.753 | $ | 8.077 | $ | 8.399 | $ | 9.028 | $ | 9.906 | $ | 7.906 | $ | 9.960 | $ | 11.002 | $ | 11.769 | $ | 12.219 | $ | 13.042 | |||||||||||||
Inflows | 0.126 | 0.556 | 0.663 | 0.806 | 1.281 | 0.947 | 2.100 | 1.211 | 1.289 | 0.840 | 0.937 | 2.874 | |||||||||||||||||||||||||
Withdrawals/Terminations | (0.188 | ) | (0.226 | ) | (0.503 | ) | (0.218 | ) | (0.135 | ) | (0.163 | ) | (0.077 | ) | (0.130 | ) | (0.742 | ) | (0.296 | ) | (0.132 | ) | (0.309 | ) | |||||||||||||
Transfers | 0.003 | (0.000 | ) | (0.000 | ) | 0.005 | 0.002 | 0.001 | 0.001 | 0.000 | 0.001 | 0.001 | (0.001 | ) | 0.009 | ||||||||||||||||||||||
Net Flows | (0.059 | ) | 0.330 | 0.160 | 0.593 | 1.148 | 0.784 | 2.024 | 1.082 | 0.548 | 0.545 | 0.803 | 2.574 | ||||||||||||||||||||||||
Market | 0.207 | (0.006 | ) | 0.163 | 0.036 | (0.271 | ) | 0.339 | 0.031 | (0.040 | ) | 0.219 | (0.095 | ) | 0.019 | (0.087 | ) | ||||||||||||||||||||
Sale of Subsidiary (2) | - | - | - | - | - | (3.124 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||
Balance at End-of-Qtr | $ | 7.753 | $ | 8.077 | $ | 8.399 | $ | 9.028 | $ | 9.906 | $ | 7.906 | $ | 9.960 | $ | 11.002 | $ | 11.769 | $ | 12.219 | $ | 13.042 | $ | 15.529 | |||||||||||||
Institutional Equity - Bal-Beg-of-Qtr | $ | 15.920 | $ | 19.607 | $ | 21.008 | $ | 25.322 | $ | 27.188 | $ | 28.362 | $ | 10.490 | $ | 11.682 | $ | 11.549 | $ | 15.474 | $ | 17.760 | $ | 19.379 | |||||||||||||
Inflows | 0.727 | 1.386 | 1.315 | 1.817 | 2.049 | 1.638 | 0.650 | 0.576 | 4.563 | 1.937 | 3.280 | 1.909 | |||||||||||||||||||||||||
Withdrawals/Terminations | (0.381 | ) | (0.921 | ) | (0.419 | ) | (0.762 | ) | (1.161 | ) | (1.053 | ) | (0.607 | ) | (0.473 | ) | (1.000 | ) | (0.888 | ) | (2.160 | ) | (0.934 | ) | |||||||||||||
Transfers | 0.002 | 0.003 | 0.005 | 0.012 | 0.006 | 0.010 | 0.029 | 0.033 | (0.003 | ) | 0.012 | 0.006 | 0.003 | ||||||||||||||||||||||||
Net Flows | 0.348 | 0.469 | 0.901 | 1.068 | 0.895 | 0.595 | 0.072 | 0.135 | 3.560 | 1.061 | 1.127 | 0.977 | |||||||||||||||||||||||||
Market | 3.339 | 0.932 | 3.413 | 0.798 | 0.280 | 0.196 | 1.120 | (0.269 | ) | 0.365 | 1.225 | 0.492 | 1.313 | ||||||||||||||||||||||||
Sale of Subsidiary (2) | - | - | - | - | - | (18.664 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||
Balance at End-of-Qtr | $ | 19.607 | $ | 21.008 | $ | 25.322 | $ | 27.188 | $ | 28.362 | $ | 10.490 | $ | 11.682 | $ | 11.549 | $ | 15.474 | $ | 17.760 | $ | 19.379 | $ | 21.669 | |||||||||||||
Total Institutional - Bal-Beg-of-Qtr | $ | 23.526 | $ | 27.360 | $ | 29.085 | $ | 33.722 | $ | 36.216 | $ | 38.268 | $ | 18.396 | $ | 21.643 | $ | 22.551 | $ | 27.243 | $ | 29.979 | $ | 32.420 | |||||||||||||
Inflows | 0.853 | 1.943 | 1.978 | 2.623 | 3.331 | 2.584 | 2.750 | 1.787 | 5.852 | 2.777 | 4.217 | 4.783 | |||||||||||||||||||||||||
Withdrawals/Terminations | (0.568 | ) | (1.147 | ) | (0.922 | ) | (0.980 | ) | (1.296 | ) | (1.216 | ) | (0.684 | ) | (0.603 | ) | (1.742 | ) | (1.183 | ) | (2.292 | ) | (1.243 | ) | |||||||||||||
Transfers | 0.005 | 0.003 | 0.005 | 0.017 | 0.008 | 0.011 | 0.030 | 0.033 | (0.002 | ) | 0.012 | 0.005 | 0.012 | ||||||||||||||||||||||||
Net Flows | 0.289 | 0.799 | 1.061 | 1.661 | 2.043 | 1.379 | 2.095 | 1.217 | 4.108 | 1.606 | 1.930 | 3.551 | |||||||||||||||||||||||||
Market | 3.546 | 0.926 | 3.576 | 0.834 | 0.009 | 0.535 | 1.151 | (0.308 | ) | 0.584 | 1.130 | 0.511 | 1.226 | ||||||||||||||||||||||||
Sale of Subsidiary (2) | - | - | - | - | - | (21.787 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||
Balance at End-of-Qtr | $ | 27.360 | $ | 29.085 | $ | 33.722 | $ | 36.216 | $ | 38.268 | $ | 18.396 | $ | 21.643 | $ | 22.551 | $ | 27.243 | $ | 29.979 | $ | 32.420 | $ | 37.197 | |||||||||||||
Total Retail/Inst - At End-of-Qtr | $ | 52.456 | $ | 55.129 | $ | 62.794 | $ | 67.075 | $ | 69.643 | $ | 49.076 | $ | 56.029 | $ | 58.022 | $ | 65.963 | $ | 72.488 | $ | 77.093 | $ | 86.021 | |||||||||||||
Insurance-related Assets-End-of-Qtr | $ | 43.857 | $ | 42.984 | $ | 43.024 | $ | 44.006 | $ | 42.528 | $ | 44.047 | $ | 43.980 | $ | 44.210 | $ | 45.219 | $ | 44.503 | $ | 44.483 | $ | 43.430 | |||||||||||||
Total Retail/Inst - Net Flows | $ | 0.591 | $ | 1.169 | $ | 1.645 | $ | 2.629 | $ | 2.660 | $ | 1.760 | $ | 3.265 | $ | 2.796 | $ | 6.439 | $ | 3.447 | $ | 3.277 | $ | 5.004 | |||||||||||||
Total Assets Under Management | |||||||||||||||||||||||||||||||||||||
At End-of-Qtr | $ | 96.313 | $ | 98.113 | $ | 105.818 | $ | 111.081 | $ | 112.172 | $ | 93.123 | $ | 100.009 | $ | 102.231 | $ | 111.182 | $ | 116.992 | $ | 121.576 | $ | 129.452 | |||||||||||||
Subadvised Assets, included in Assets Under Management above | |||||||||||||||||||||||||||||||||||||
Retail | $ | 2.970 | $ | 3.240 | $ | 3.750 | $ | 4.000 | $ | 4.290 | $ | 8.830 | $ | 10.740 | $ | 12.178 | $ | 13.712 | $ | 15.905 | $ | 17.162 | $ | 19.127 | |||||||||||||
Institutional | 0.030 | 0.020 | 0.030 | 0.030 | 0.030 | 3.070 | 3.740 | 3.921 | 4.221 | 4.641 | 4.782 | 5.274 | |||||||||||||||||||||||||
Total Subadvised Assets | $ | 3.000 | $ | 3.260 | $ | 3.780 | $ | 4.030 | $ | 4.320 | $ | 11.900 | $ | 14.480 | $ | 16.100 | $ | 17.933 | $ | 20.545 | $ | 21.945 | $ | 24.400 | |||||||||||||
(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 31A 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. |
3/31/2006 | PAGE 31A | ||||||||||||||||||||||||||||||||||||
Investment Management (excluding Assets | |||||||||||||||||||||||||||||||||||||
Managed by Delaware's London-based International Investment Unit) | |||||||||||||||||||||||||||||||||||||
Assets Under Management Roll Forward | |||||||||||||||||||||||||||||||||||||
Unaudited [Billions of Dollars] | |||||||||||||||||||||||||||||||||||||
Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | ||||||||||||||||||||||||||
2003 | 2003 | 2003 | 2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | ||||||||||||||||||||||||||
Retail Fixed - Bal-Beg-of-Qtr | $ | 7.907 | $ | 8.190 | $ | 8.083 | $ | 8.186 | $ | 8.313 | $ | 8.152 | $ | 8.060 | $ | 8.257 | $ | 8.501 | $ | 8.823 | $ | 9.061 | $ | 9.199 | |||||||||||||
Fund Sales | 0.469 | 0.443 | 0.456 | 0.513 | 0.452 | 0.425 | 0.493 | 0.608 | 0.612 | 0.602 | 0.661 | 0.597 | |||||||||||||||||||||||||
Redemptions | (0.318 | ) | (0.435 | ) | (0.361 | ) | (0.418 | ) | (0.462 | ) | (0.341 | ) | (0.299 | ) | (0.373 | ) | (0.325 | ) | (0.346 | ) | (0.432 | ) | (0.475 | ) | |||||||||||||
Net Money Market | (0.006 | ) | (0.008 | ) | (0.014 | ) | (0.036 | ) | 0.012 | (0.069 | ) | (0.020 | ) | (0.026 | ) | (0.015 | ) | (0.010 | ) | (0.010 | ) | (0.043 | ) | ||||||||||||||
Transfers | (0.055 | ) | (0.086 | ) | (0.088 | ) | (0.035 | ) | (0.019 | ) | (0.119 | ) | (0.040 | ) | 0.104 | (0.107 | ) | 0.023 | (0.102 | ) | 0.034 | ||||||||||||||||
Net Flows | 0.090 | (0.087 | ) | (0.008 | ) | 0.024 | (0.017 | ) | (0.104 | ) | 0.134 | 0.314 | 0.166 | 0.268 | 0.117 | 0.113 | |||||||||||||||||||||
Market | 0.193 | (0.020 | ) | 0.111 | 0.103 | (0.144 | ) | 0.207 | 0.125 | (0.068 | ) | 0.156 | (0.030 | ) | 0.021 | 0.022 | |||||||||||||||||||||
Transfer of Assets Under Administration (1) | - | - | - | - | - | (0.194 | ) | (0.062 | ) | (0.001 | ) | - | - | - | - | ||||||||||||||||||||||
Balance at End-of-Qtr | $ | 8.190 | $ | 8.083 | $ | 8.186 | $ | 8.313 | $ | 8.152 | $ | 8.060 | $ | 8.257 | $ | 8.501 | $ | 8.823 | $ | 9.061 | $ | 9.199 | $ | 9.334 | |||||||||||||
Retail Equity - Bal-Beg-of-Qtr | $ | 14.048 | $ | 16.622 | $ | 17.673 | $ | 20.564 | $ | 22.225 | $ | 22.906 | $ | 22.620 | $ | 26.130 | $ | 26.970 | $ | 29.898 | $ | 33.449 | $ | 35.474 | |||||||||||||
Fund Sales | 0.812 | 1.048 | 1.208 | 1.936 | 1.664 | 1.478 | 2.026 | 2.773 | 3.421 | 2.882 | 2.497 | 3.184 | |||||||||||||||||||||||||
Redemptions | (0.608 | ) | (0.698 | ) | (0.694 | ) | (0.979 | ) | (1.019 | ) | (1.074 | ) | (0.953 | ) | (1.325 | ) | (1.305 | ) | (1.198 | ) | (1.310 | ) | (1.762 | ) | |||||||||||||
Transfers | 0.011 | 0.112 | 0.092 | (0.002 | ) | (0.004 | ) | 0.085 | (0.037 | ) | (0.183 | ) | 0.049 | (0.111 | ) | 0.042 | (0.083 | ) | |||||||||||||||||||
Net Flows | 0.214 | 0.462 | 0.606 | 0.956 | 0.641 | 0.490 | 1.036 | 1.265 | 2.166 | 1.573 | 1.229 | 1.339 | |||||||||||||||||||||||||
Market | 2.359 | 0.589 | 2.285 | 0.706 | 0.039 | (0.194 | ) | 2.685 | (0.423 | ) | 0.763 | 1.979 | 0.796 | 2.677 | |||||||||||||||||||||||
Transfer of Assets Under Administration (1) | - | - | - | - | - | (0.582 | ) | (0.211 | ) | (0.003 | ) | - | - | - | - | ||||||||||||||||||||||
Balance at End-of-Qtr | $ | 16.622 | $ | 17.673 | $ | 20.564 | $ | 22.225 | $ | 22.906 | $ | 22.620 | $ | 26.130 | $ | 26.970 | $ | 29.898 | $ | 33.449 | $ | 35.474 | $ | 39.490 | |||||||||||||
Total Retail - Bal-Beg-of-Qtr | $ | 21.955 | $ | 24.812 | $ | 25.756 | $ | 28.750 | $ | 30.538 | $ | 31.057 | $ | 30.680 | $ | 34.387 | $ | 35.471 | $ | 38.720 | $ | 42.509 | $ | 44.673 | |||||||||||||
Retail Sales-Annuities | 0.526 | 0.570 | 0.560 | 0.751 | 0.666 | 0.598 | 0.737 | 0.735 | 0.655 | 0.752 | 0.815 | 0.918 | |||||||||||||||||||||||||
Retail Sales-Mutual Funds | 0.558 | 0.644 | 0.663 | 0.905 | 0.729 | 0.680 | 0.922 | 1.336 | 1.255 | 1.159 | 1.110 | 1.094 | |||||||||||||||||||||||||
Retail Sales-Managed Acct. & Other | 0.196 | 0.277 | 0.441 | 0.793 | 0.721 | 0.625 | 0.860 | 1.310 | 2.123 | 1.573 | 1.232 | 1.769 | |||||||||||||||||||||||||
Total Retail Sales | 1.280 | 1.491 | 1.664 | 2.449 | 2.115 | 1.903 | 2.519 | 3.381 | 4.034 | 3.484 | 3.158 | 3.781 | |||||||||||||||||||||||||
Redemptions | (0.926 | ) | (1.133 | ) | (1.055 | ) | (1.396 | ) | (1.481 | ) | (1.415 | ) | (1.252 | ) | (1.697 | ) | (1.630 | ) | (1.545 | ) | (1.741 | ) | (2.237 | ) | |||||||||||||
Net Money Market | (0.006 | ) | (0.008 | ) | (0.014 | ) | (0.036 | ) | 0.012 | (0.069 | ) | (0.020 | ) | (0.026 | ) | (0.015 | ) | (0.010 | ) | (0.010 | ) | (0.043 | ) | ||||||||||||||
Transfers | (0.044 | ) | 0.025 | 0.004 | (0.037 | ) | (0.022 | ) | (0.034 | ) | (0.077 | ) | (0.079 | ) | (0.058 | ) | (0.089 | ) | (0.060 | ) | (0.049 | ) | |||||||||||||||
Net Flows | 0.304 | 0.375 | 0.598 | 0.980 | 0.624 | 0.386 | 1.170 | 1.579 | 2.331 | 1.841 | 1.347 | 1.452 | |||||||||||||||||||||||||
Market | 2.552 | 0.569 | 2.396 | 0.808 | (0.105 | ) | 0.013 | 2.810 | (0.491 | ) | 0.919 | 1.948 | 0.817 | 2.699 | |||||||||||||||||||||||
Transfer of Assets Under Administration (1) | - | - | - | - | - | (0.776 | ) | (0.273 | ) | (0.004 | ) | - | - | - | - | ||||||||||||||||||||||
Balance at End-of-Qtr | $ | 24.812 | $ | 25.756 | $ | 28.750 | $ | 30.538 | $ | 31.057 | $ | 30.680 | $ | 34.387 | $ | 35.471 | $ | 38.720 | $ | 42.509 | $ | 44.673 | $ | 48.824 | |||||||||||||
Institutional Fixed - Bal-Beg-of-Qtr | $ | 5.530 | $ | 5.481 | $ | 5.834 | $ | 5.981 | $ | 6.501 | $ | 6.980 | $ | 7.906 | $ | 9.960 | $ | 11.002 | $ | 11.769 | $ | 12.219 | $ | 13.042 | |||||||||||||
Inflows | 0.120 | 0.516 | 0.351 | 0.655 | 0.776 | 0.825 | 2.100 | 1.211 | 1.289 | 0.840 | 0.937 | 2.874 | |||||||||||||||||||||||||
Withdrawals/Terminations | (0.152 | ) | (0.089 | ) | (0.236 | ) | (0.138 | ) | (0.109 | ) | (0.127 | ) | (0.077 | ) | (0.130 | ) | (0.742 | ) | (0.296 | ) | (0.132 | ) | (0.309 | ) | |||||||||||||
Transfers | (0.099 | ) | (0.056 | ) | 0.028 | 0.005 | 0.002 | 0.001 | 0.001 | 0.000 | 0.001 | 0.001 | (0.001 | ) | 0.009 | ||||||||||||||||||||||
Net Flows | (0.132 | ) | 0.371 | 0.143 | 0.521 | 0.669 | 0.699 | 2.024 | 1.082 | 0.548 | 0.545 | 0.803 | 2.574 | ||||||||||||||||||||||||
Market | 0.083 | (0.019 | ) | 0.004 | (0.001 | ) | (0.191 | ) | 0.227 | 0.031 | (0.040 | ) | 0.219 | (0.095 | ) | 0.019 | (0.087 | ) | |||||||||||||||||||
Balance at End-of-Qtr | $ | 5.481 | $ | 5.834 | $ | 5.981 | $ | 6.501 | $ | 6.980 | $ | 7.906 | $ | 9.960 | $ | 11.002 | $ | 11.769 | $ | 12.219 | $ | 13.042 | $ | 15.529 | |||||||||||||
Institutional Equity - Bal-Beg-of-Qtr | $ | 7.041 | $ | 8.462 | $ | 8.826 | $ | 10.318 | $ | 10.713 | $ | 10.435 | $ | 10.490 | $ | 11.682 | $ | 11.549 | $ | 15.474 | $ | 17.760 | $ | 19.379 | |||||||||||||
Inflows | 0.347 | 0.571 | 0.524 | 0.552 | 0.596 | 0.484 | 0.650 | 0.576 | 4.563 | 1.937 | 3.280 | 1.909 | |||||||||||||||||||||||||
Withdrawals/Terminations | (0.232 | ) | (0.516 | ) | (0.231 | ) | (0.501 | ) | (0.959 | ) | (0.361 | ) | (0.607 | ) | (0.473 | ) | (1.000 | ) | (0.888 | ) | (2.160 | ) | (0.934 | ) | |||||||||||||
Transfers | 0.002 | 0.003 | 0.021 | (0.012 | ) | 0.073 | 0.029 | 0.029 | 0.033 | (0.003 | ) | 0.012 | 0.006 | 0.003 | |||||||||||||||||||||||
Net Flows | 0.116 | 0.059 | 0.314 | 0.038 | (0.290 | ) | 0.152 | 0.072 | 0.135 | 3.560 | 1.061 | 1.127 | 0.977 | ||||||||||||||||||||||||
Market | 1.305 | 0.305 | 1.178 | 0.357 | 0.012 | (0.096 | ) | 1.120 | (0.269 | ) | 0.365 | 1.225 | 0.492 | 1.313 | |||||||||||||||||||||||
Balance at End-of-Qtr | $ | 8.462 | $ | 8.826 | $ | 10.318 | $ | 10.713 | $ | 10.435 | $ | 10.490 | $ | 11.682 | $ | 11.549 | $ | 15.474 | $ | 17.760 | $ | 19.379 | $ | 21.669 | |||||||||||||
Total Institutional - Bal-Beg-of-Qtr | $ | 12.571 | $ | 13.943 | $ | 14.660 | $ | 16.299 | $ | 17.215 | $ | 17.414 | $ | 18.396 | $ | 21.643 | $ | 22.551 | $ | 27.243 | $ | 29.979 | $ | 32.420 | |||||||||||||
Inflows | 0.466 | 1.088 | 0.874 | 1.206 | 1.372 | 1.309 | 2.750 | 1.787 | 5.852 | 2.777 | 4.217 | 4.783 | |||||||||||||||||||||||||
Withdrawals/Terminations | (0.385 | ) | (0.604 | ) | (0.466 | ) | (0.640 | ) | (1.068 | ) | (0.488 | ) | (0.684 | ) | (0.603 | ) | (1.742 | ) | (1.183 | ) | (2.292 | ) | (1.243 | ) | |||||||||||||
Transfers | (0.098 | ) | (0.053 | ) | 0.049 | (0.007 | ) | 0.075 | 0.030 | 0.030 | 0.033 | (0.002 | ) | 0.012 | 0.005 | 0.012 | |||||||||||||||||||||
Net Flows | (0.016 | ) | 0.430 | 0.457 | 0.560 | 0.379 | 0.851 | 2.095 | 1.217 | 4.108 | 1.606 | 1.930 | 3.551 | ||||||||||||||||||||||||
Market | 1.388 | 0.287 | 1.182 | 0.356 | (0.179 | ) | 0.131 | 1.151 | (0.308 | ) | 0.584 | 1.130 | 0.511 | 1.226 | |||||||||||||||||||||||
Balance at End-of-Qtr | $ | 13.943 | $ | 14.660 | $ | 16.299 | $ | 17.215 | $ | 17.414 | $ | 18.396 | $ | 21.643 | $ | 22.551 | $ | 27.243 | $ | 29.979 | $ | 32.420 | $ | 37.197 | |||||||||||||
Total Retail/Inst - At End-of-Qtr | $ | 38.755 | $ | 40.416 | $ | 45.049 | $ | 47.753 | $ | 48.471 | $ | 49.076 | $ | 56.029 | $ | 58.022 | $ | 65.963 | $ | 72.488 | $ | 77.093 | $ | 86.021 | |||||||||||||
Insurance-related Assets-End-of-Qtr | $ | 43.857 | $ | 42.984 | $ | 43.024 | $ | 44.006 | $ | 42.528 | $ | 44.047 | $ | 43.980 | $ | 44.210 | $ | 45.219 | $ | 44.503 | $ | 44.483 | $ | 43.430 | |||||||||||||
Total Retail/Inst - Net Flows | $ | 0.288 | $ | 0.805 | $ | 1.055 | $ | 1.540 | $ | 1.003 | $ | 1.236 | $ | 3.265 | $ | 2.796 | $ | 6.439 | $ | 3.447 | $ | 3.277 | $ | 5.004 | |||||||||||||
Total Assets Under Management | |||||||||||||||||||||||||||||||||||||
At End-of-Qtr | $ | 82.612 | $ | 83.400 | $ | 88.072 | $ | 91.759 | $ | 91.000 | $ | 93.123 | $ | 100.009 | $ | 102.231 | $ | 111.182 | $ | 116.992 | $ | 121.576 | $ | 129.452 | |||||||||||||
Subadvised Assets, included in Assets Under Management above | |||||||||||||||||||||||||||||||||||||
Retail | $ | 2.970 | $ | 3.240 | $ | 3.750 | $ | 4.000 | $ | 4.290 | $ | 8.830 | $ | 10.740 | $ | 12.178 | $ | 13.712 | $ | 15.905 | $ | 17.162 | $ | 19.127 | |||||||||||||
Institutional | 0.030 | 0.020 | 0.030 | 0.030 | 0.030 | 3.070 | 3.740 | 3.921 | 4.221 | 4.641 | 4.782 | 5.274 | |||||||||||||||||||||||||
Total Subadvised Assets | $ | 3.000 | $ | 3.260 | $ | 3.780 | $ | 4.030 | $ | 4.320 | $ | 11.900 | $ | 14.480 | $ | 16.100 | $ | 17.933 | $ | 20.545 | $ | 21.945 | $ | 24.400 | |||||||||||||
(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. |
3/31/2006 | PAGE 32 | |||||||||||||||
Lincoln UK | ||||||||||||||||
Income Statements | ||||||||||||||||
Unaudited [Millions of Dollars] | ||||||||||||||||
For the Year Ended December 31 | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||
Operating Revenue | ||||||||||||||||
Premiums | $ | 46.1 | $ | 50.6 | $ | 62.2 | $ | 70.3 | $ | 63.3 | ||||||
Mortality assessments | 33.9 | 32.4 | 35.7 | 39.5 | 34.8 | |||||||||||
Expense assessments | 134.8 | 105.3 | 93.9 | 103.9 | 111.5 | |||||||||||
Other revenue and fees | (1.4 | ) | 24.9 | 18.6 | 52.8 | 30.3 | ||||||||||
Net investment income | 64.8 | 62.1 | 64.1 | 75.7 | 78.6 | |||||||||||
Total Operating Revenue | 278.2 | 275.4 | 274.5 | 342.2 | 318.4 | |||||||||||
Operating Expenses | ||||||||||||||||
Benefits paid or provided | 83.4 | 84.2 | 98.6 | 100.4 | 116.0 | |||||||||||
Underwriting, acquisition, | ||||||||||||||||
insurance and other expenses: | ||||||||||||||||
Commissions and other volume-related expenses | 10.8 | 6.1 | 3.8 | 2.9 | 2.3 | |||||||||||
Operating and administrative expenses | 82.5 | 77.0 | 78.3 | 81.0 | 98.3 | |||||||||||
Subtotal | 93.2 | 83.1 | 82.1 | 83.9 | 100.6 | |||||||||||
DAC deferral net of amortization | 31.7 | 46.5 | 39.1 | 72.8 | 45.1 | |||||||||||
VOBA amortization | 22.5 | 30.8 | (10.7 | ) | 18.1 | (10.1 | ) | |||||||||
Total underwriting, acquisition, | ||||||||||||||||
insurance and other expenses | 147.4 | 160.5 | 110.4 | 174.8 | 135.7 | |||||||||||
Goodwill amortization | 0.6 | - | - | - | - | |||||||||||
Total Operating Expenses | 231.5 | 244.7 | 209.0 | 275.2 | 251.7 | |||||||||||
Operating income before federal taxes | 46.8 | 30.7 | 65.5 | 67.0 | 66.7 | |||||||||||
Federal income taxes | (11.3 | ) | (3.9 | ) | 21.9 | 23.4 | 23.4 | |||||||||
Income from Operations | $ | 58.1 | $ | 34.6 | $ | 43.6 | $ | 43.5 | $ | 43.4 | ||||||
Effective tax rate | (24.2 | %) | (12.8 | %) | 33.4 | % | 35.0 | % | 35.0 | % | ||||||
Average capital | $ | 593.8 | $ | 549.9 | $ | 478.9 | $ | 435.4 | $ | 446.8 | ||||||
Return on average capital | 9.8 | % | 6.3 | % | 9.1 | % | 10.0 | % | 9.7 | % | ||||||
Roll Forward of Deferred Acquisition Costs | ||||||||||||||||
Balance at beginning of period | $ | 587.3 | $ | 597.6 | $ | 620.6 | $ | 590.8 | ||||||||
Deferral | 3.4 | 3.5 | 6.3 | 2.8 | ||||||||||||
Amortization | (50.0 | ) | (42.5 | ) | (79.1 | ) | (47.9 | ) | ||||||||
Included in Total Operating Expenses | (46.5 | ) | (39.1 | ) | (72.8 | ) | (45.1 | ) | ||||||||
Foreign currency translation adjustment | 56.8 | 62.1 | 42.9 | (59.5 | ) | |||||||||||
Balance at end of period | $ | 597.6 | $ | 620.6 | $ | 590.8 | $ | 486.3 | ||||||||
Roll Forward of Value of Business Acquired | ||||||||||||||||
Balance at beginning of period | $ | 244.0 | $ | 237.3 | $ | 274.7 | $ | 276.2 | ||||||||
Amortization | (30.8 | ) | 10.7 | (18.1 | ) | 10.1 | ||||||||||
Foreign currency translation adjustment | 24.1 | 26.7 | 19.6 | (29.0 | ) | |||||||||||
Balance at end of period | $ | 237.3 | $ | 274.7 | $ | 276.2 | $ | 257.2 | ||||||||
Roll Forward of Deferred Front-End Load* | ||||||||||||||||
Balance at beginning of period | $ | 417.6 | $ | 410.0 | $ | 428.2 | $ | 457.9 | $ | 437.5 | ||||||
Deferral | 33.4 | 16.7 | 10.4 | 6.6 | 4.2 | |||||||||||
Amortization | (30.4 | ) | (38.7 | ) | (26.4 | ) | (58.7 | ) | (34.8 | ) | ||||||
Included in Income from Operations | 3.0 | (22.0 | ) | (16.0 | ) | (52.1 | ) | (30.6 | ) | |||||||
Foreign currency translation adjustment | (10.6 | ) | 40.2 | 45.8 | 31.7 | (43.9 | ) | |||||||||
Balance at end of period | $ | 410.0 | $ | 428.2 | $ | 457.9 | $ | 437.5 | $ | 363.1 | ||||||
* Included in Insurance and Investment Contract Liabilities on the Balance Sheet |
3/31/2006 | PAGE 33 | |||||||||||||||||||||||||||
Lincoln UK | ||||||||||||||||||||||||||||
Income Statements | ||||||||||||||||||||||||||||
Unaudited [Millions of Dollars] | ||||||||||||||||||||||||||||
For the Quarter Ended | Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | |||||||||||||||||||
2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | ||||||||||||||||||||
Operating Revenue | ||||||||||||||||||||||||||||
Premiums | $ | 18.1 | $ | 19.6 | $ | 17.7 | $ | 14.9 | $ | 14.6 | $ | 16.4 | $ | 16.9 | $ | 15.4 | $ | 16.5 | ||||||||||
Mortality assessments | 9.6 | 10.4 | 9.7 | 9.8 | 9.0 | 9.4 | 9.0 | 7.3 | 7.8 | |||||||||||||||||||
Expense assessments | 24.2 | 24.4 | 27.0 | 28.3 | 26.6 | 27.9 | 27.9 | 29.1 | 25.7 | |||||||||||||||||||
Other revenue and fees | 5.8 | 8.3 | 22.8 | 16.0 | 4.1 | 5.2 | 28.1 | (7.1 | ) | 2.4 | ||||||||||||||||||
Net investment income | 18.5 | 18.3 | 18.7 | 20.2 | 20.3 | 19.6 | 20.9 | 17.8 | 17.0 | |||||||||||||||||||
Total Operating Revenue | 76.1 | 81.0 | 95.8 | 89.3 | 74.6 | 78.4 | 102.8 | 62.5 | 69.5 | |||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||||
Benefits paid or provided | 29.0 | 28.8 | 21.4 | 21.3 | 25.1 | 27.9 | 35.5 | 27.5 | 25.4 | |||||||||||||||||||
Underwriting, acquisition, | ||||||||||||||||||||||||||||
insurance and other expenses: | ||||||||||||||||||||||||||||
Commissions and other volume-related expenses | 0.6 | 0.6 | 0.7 | 1.0 | 0.6 | 0.7 | 0.9 | 0.1 | 0.9 | |||||||||||||||||||
Operating and administrative expenses | 23.0 | 22.3 | 21.6 | 14.1 | 25.4 | 23.8 | 24.9 | 24.2 | 22.7 | |||||||||||||||||||
Subtotal | 23.5 | 22.9 | 22.4 | 15.1 | 25.9 | 24.5 | 25.8 | 24.3 | 23.6 | |||||||||||||||||||
DAC deferral net of amortization | 11.0 | 12.6 | 27.2 | 21.9 | 7.1 | 8.4 | 37.0 | (7.4 | ) | 3.5 | ||||||||||||||||||
VOBA amortization | 3.0 | 0.1 | 9.4 | 5.6 | 1.0 | 1.7 | (10.2 | ) | (2.5 | ) | 0.5 | |||||||||||||||||
Total underwriting, acquisition, | ||||||||||||||||||||||||||||
insurance and other expenses | 37.6 | 35.7 | 59.0 | 42.5 | 34.0 | 34.7 | 52.7 | 14.3 | 27.6 | |||||||||||||||||||
Total Operating Expenses | 66.6 | 64.5 | 80.3 | 63.8 | 59.2 | 62.6 | 88.1 | 41.8 | 52.9 | |||||||||||||||||||
Operating income before federal income taxes | 9.5 | 16.5 | 15.5 | 25.5 | 15.5 | 15.9 | 14.7 | 20.7 | 16.5 | |||||||||||||||||||
Federal income taxes | 3.3 | 5.8 | 5.4 | 8.9 | 5.4 | 5.6 | 5.1 | 7.2 | 5.8 | |||||||||||||||||||
Income from Operations | $ | 6.2 | $ | 10.7 | $ | 10.1 | $ | 16.6 | $ | 10.0 | $ | 10.3 | $ | 9.6 | $ | 13.5 | $ | 10.7 | ||||||||||
Effective tax rate on | ||||||||||||||||||||||||||||
Income from Operations | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | 35.0 | % | ||||||||||
Average capital | $ | 447.9 | $ | 421.2 | $ | 432.5 | $ | 439.9 | $ | 440.2 | $ | 446.4 | $ | 452.7 | $ | 447.8 | $ | 427.0 | ||||||||||
Return on average capital | 5.5 | % | 10.2 | % | 9.3 | % | 15.1 | % | 9.1 | % | 9.2 | % | 8.4 | % | 12.0 | % | 10.1 | % | ||||||||||
Roll Forward of Deferred Acquisition Costs | ||||||||||||||||||||||||||||
Balance at beginning of period | $ | 620.7 | $ | 629.6 | $ | 608.6 | $ | 578.9 | $ | 590.9 | $ | 576.9 | $ | 537.0 | $ | 492.0 | $ | 486.3 | ||||||||||
Deferral | 1.5 | 1.8 | 1.4 | 1.6 | 0.7 | 0.7 | 0.7 | 0.7 | 0.5 | |||||||||||||||||||
Amortization | (12.5 | ) | (14.4 | ) | (28.6 | ) | (23.5 | ) | (7.8 | ) | (9.1 | ) | (37.7 | ) | 6.7 | (4.0 | ) | |||||||||||
Included in Total Operating Expenses | (11.0 | ) | (12.6 | ) | (27.2 | ) | (21.9 | ) | (7.1 | ) | (8.4 | ) | (37.0 | ) | 7.4 | (3.5 | ) | |||||||||||
Foreign currency translation adjustment | 19.9 | (8.4 | ) | (2.5 | ) | 33.8 | (7.0 | ) | (31.4 | ) | (8.0 | ) | (13.2 | ) | 5.1 | |||||||||||||
Balance at end of period | $ | 629.6 | $ | 608.6 | $ | 578.9 | $ | 590.9 | $ | 576.9 | $ | 537.0 | $ | 492.0 | $ | 486.3 | $ | 487.9 | ||||||||||
Roll Forward of Value of Business Acquired | ||||||||||||||||||||||||||||
Balance at beginning of period | $ | 276.1 | $ | 280.5 | $ | 276.7 | $ | 266.2 | $ | 276.1 | $ | 271.9 | $ | 255.3 | $ | 261.5 | $ | 257.2 | ||||||||||
Amortization | (3.0 | ) | (0.1 | ) | (9.4 | ) | (5.6 | ) | (1.0 | ) | (1.7 | ) | 10.2 | 2.5 | (0.5 | ) | ||||||||||||
Foreign currency translation adjustment | 7.4 | (3.7 | ) | (1.1 | ) | 15.6 | (3.3 | ) | (14.8 | ) | (4.1 | ) | (6.9 | ) | 2.7 | |||||||||||||
Balance at end of period | $ | 280.5 | $ | 276.7 | $ | 266.2 | $ | 276.1 | $ | 271.9 | $ | 255.3 | $ | 261.5 | $ | 257.2 | $ | 259.3 | ||||||||||
Roll Forward of Deferred Front-End Load | ||||||||||||||||||||||||||||
Balance at beginning of period | $ | 457.9 | $ | 466.9 | $ | 452.5 | $ | 428.0 | $ | 437.5 | $ | 428.3 | $ | 399.8 | $ | 365.8 | $ | 363.1 | ||||||||||
Deferral | 2.1 | 1.7 | 1.4 | 1.3 | 1.5 | 1.1 | 0.9 | 0.7 | 1.0 | |||||||||||||||||||
Amortization | (7.8 | ) | (9.9 | ) | (24.1 | ) | (16.8 | ) | (5.5 | ) | (6.2 | ) | (29.0 | ) | 6.0 | (3.4 | ) | |||||||||||
Included in Income from Operations | (5.7 | ) | (8.2 | ) | (22.7 | ) | (15.5 | ) | (4.0 | ) | (5.1 | ) | (28.1 | ) | 6.7 | (2.4 | ) | |||||||||||
Foreign currency translation adjustment | 14.7 | (6.2 | ) | (1.8 | ) | 25.0 | (5.2 | ) | (23.3 | ) | (5.9 | ) | (9.5 | ) | 3.8 | |||||||||||||
Balance at end of period | $ | 466.9 | $ | 452.5 | $ | 428.0 | $ | 437.5 | $ | 428.3 | $ | 399.8 | $ | 365.8 | $ | 363.1 | $ | 364.5 | ||||||||||
* Included in Insurance and Investment Contract Liabilities on the Balance Sheet |
3/31/2006 | PAGE 34 | |||||||||||||||||||||||||||
Lincoln UK | ||||||||||||||||||||||||||||
Operational Data | ||||||||||||||||||||||||||||
Unaudited [Billions of Dollars] | ||||||||||||||||||||||||||||
For the Year Ended December 31 | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||||||||||||||
Unit Linked Assets - Beg-of-Year | $ | 6.441 | $ | 5.607 | $ | 5.079 | $ | 6.390 | $ | 7.186 | ||||||||||||||||||
Deposits | 0.481 | 0.453 | 0.392 | 0.378 | 0.389 | |||||||||||||||||||||||
Withdrawals (incl. chgs) & Deaths | (0.529 | ) | (0.519 | ) | (0.614 | ) | (0.712 | ) | (0.728 | ) | ||||||||||||||||||
Net Flows | (0.048 | ) | (0.066 | ) | (0.222 | ) | (0.335 | ) | (0.339 | ) | ||||||||||||||||||
Inv Inc & Chg in Mkt Val | (0.617 | ) | (1.004 | ) | 0.918 | 0.648 | 1.243 | |||||||||||||||||||||
Foreign Currency Adjustment | (0.169 | ) | 0.542 | 0.616 | 0.482 | (0.770 | ) | |||||||||||||||||||||
Unit Linked Assets - end of year | $ | 5.607 | $ | 5.079 | $ | 6.390 | $ | 7.186 | $ | 7.320 | ||||||||||||||||||
Individual Life In-force | $ | 20.878 | $ | 18.896 | $ | 20.393 | $ | 20.378 | $ | 17.521 | ||||||||||||||||||
Exchange Rate - Dollars to Pounds | ||||||||||||||||||||||||||||
For-the-Period | 1.441 | 1.503 | 1.638 | 1.834 | 1.821 | |||||||||||||||||||||||
End-of-Period | 1.456 | 1.610 | 1.786 | 1.919 | 1.719 | |||||||||||||||||||||||
For the Quarter Ended | Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | |||||||||||||||||||
2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | ||||||||||||||||||||
Unit Linked Assets | ||||||||||||||||||||||||||||
Balance-Beg-of-Quarter | $ | 6.390 | $ | 6.528 | $ | 6.476 | $ | 6.468 | $ | 7.186 | $ | 7.173 | $ | 6.903 | $ | 7.180 | $ | 7.320 | ||||||||||
Deposits | 0.083 | 0.085 | 0.102 | 0.108 | 0.075 | 0.070 | 0.088 | 0.156 | 0.069 | |||||||||||||||||||
Withdrawals (incl. chgs) & Deaths | (0.172 | ) | (0.177 | ) | (0.175 | ) | (0.188 | ) | (0.175 | ) | (0.183 | ) | (0.192 | ) | (0.178 | ) | (0.186 | ) | ||||||||||
Net Flows | (0.090 | ) | (0.092 | ) | (0.074 | ) | (0.080 | ) | (0.100 | ) | (0.113 | ) | (0.104 | ) | (0.023 | ) | (0.118 | ) | ||||||||||
Inv Inc & Chg in Mkt Val | 0.020 | 0.127 | 0.091 | 0.411 | 0.171 | 0.233 | 0.492 | 0.347 | 0.479 | |||||||||||||||||||
Foreign Currency Adjustment | 0.207 | (0.087 | ) | (0.025 | ) | 0.387 | (0.085 | ) | (0.390 | ) | (0.111 | ) | (0.184 | ) | 0.072 | |||||||||||||
Unit Linked Assets - End-of-Quarter | $ | 6.528 | $ | 6.476 | $ | 6.468 | $ | 7.186 | $ | 7.173 | $ | 6.903 | $ | 7.180 | $ | 7.320 | $ | 7.754 | ||||||||||
Individual Life In-force | $ | 20.522 | $ | 19.846 | $ | 19.380 | $ | 20.378 | $ | 19.820 | $ | 18.479 | $ | 18.175 | $ | 17.521 | $ | 17.744 | ||||||||||
Exchange Rate - Dollars to Pounds | ||||||||||||||||||||||||||||
For-the-Quarter | 1.836 | 1.814 | 1.813 | 1.875 | 1.904 | 1.855 | 1.779 | 1.747 | 1.754 | |||||||||||||||||||
End-of-Quarter | 1.844 | 1.819 | 1.812 | 1.919 | 1.896 | 1.792 | 1.764 | 1.719 | 1.737 |
3/31/2006 | PAGE 35 | |||||||||||||||||||||||||||
Other Operations | ||||||||||||||||||||||||||||
Unaudited [Millions of Dollars] | ||||||||||||||||||||||||||||
For the Year Ended December 31 | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||||||||||||||
Operating Revenue by Source: | ||||||||||||||||||||||||||||
Lincoln Financial Advisors | $ | 360.7 | $ | 318.0 | $ | 316.9 | $ | 383.6 | $ | 514.0 | ||||||||||||||||||
Lincoln Financial Distributors | 113.4 | 127.3 | 140.9 | 245.2 | 290.7 | |||||||||||||||||||||||
Total Distribution | 474.0 | 445.4 | 457.8 | 628.8 | 804.7 | |||||||||||||||||||||||
Reinsurance | 1,699.4 | - | - | - | - | |||||||||||||||||||||||
Amortization of deferred gain on indemnity reinsurance* | 20.4 | 75.2 | 72.3 | 87.0 | 75.7 | |||||||||||||||||||||||
Other [Including | ||||||||||||||||||||||||||||
Consolidating Adjustments] | (377.9 | ) | (165.6 | ) | (245.8 | ) | (380.7 | ) | (528.3 | ) | ||||||||||||||||||
Total Operating Revenue | $ | 1,815.9 | $ | 355.0 | $ | 284.2 | $ | 335.1 | $ | 352.1 | ||||||||||||||||||
Income (Loss) from Operations by Source: | ||||||||||||||||||||||||||||
Lincoln Financial Advisors | $ | (20.1 | ) | $ | (31.4 | ) | $ | (33.2 | ) | $ | (17.8 | ) | $ | (13.2 | ) | |||||||||||||
Lincoln Financial Distributors | (33.2 | ) | (35.2 | ) | (33.4 | ) | (23.7 | ) | (22.8 | ) | ||||||||||||||||||
Total Distribution | (53.3 | ) | (66.6 | ) | (66.6 | ) | (41.5 | ) | (36.1 | ) | ||||||||||||||||||
Reinsurance | 128.8 | - | - | - | - | |||||||||||||||||||||||
Amortization of deferred gain on indemnity reinsurance* | 12.9 | 48.9 | 47.0 | 56.5 | 49.2 | |||||||||||||||||||||||
LNC Financing | (77.9 | ) | (43.0 | ) | (56.7 | ) | (61.0 | ) | (57.6 | ) | ||||||||||||||||||
Other Corporate (1) | (9.5 | ) | 3.5 | (5.4 | ) | (11.3 | ) | 46.3 | ||||||||||||||||||||
Income (Loss) from Operations | $ | 1.0 | $ | (57.2 | ) | $ | (81.8 | ) | $ | (57.2 | ) | $ | 1.8 | |||||||||||||||
Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | ||||||||||||||||||||
For the Quarter Ended | 2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | |||||||||||||||||||
Operating Revenue by Source: | ||||||||||||||||||||||||||||
Lincoln Financial Advisors | $ | 92.0 | $ | 96.0 | $ | 91.7 | $ | 103.9 | $ | 128.1 | $ | 125.2 | $ | 124.5 | $ | 136.2 | $ | 121.4 | ||||||||||
Lincoln Financial Distributors | 57.5 | 58.4 | 59.9 | 69.4 | 63.5 | 68.9 | 73.2 | 85.1 | 72.4 | |||||||||||||||||||
Total Distribution | 149.6 | 154.4 | 151.6 | 173.2 | 191.6 | 194.1 | 197.7 | 221.3 | 193.8 | |||||||||||||||||||
Amortization of deferred gain on | ||||||||||||||||||||||||||||
indemnity reinsurance* | 17.9 | 17.9 | 32.1 | 19.1 | 18.9 | 18.9 | 18.9 | 18.9 | 18.8 | |||||||||||||||||||
Other [Including | ||||||||||||||||||||||||||||
Consolidating Adjustments] | (111.3 | ) | (66.8 | ) | (91.2 | ) | (111.3 | ) | (136.7 | ) | (117.8 | ) | (122.8 | ) | (151.0 | ) | (128.6 | ) | ||||||||||
Total Operating Revenue | $ | 56.1 | $ | 105.5 | $ | 92.4 | $ | 81.1 | $ | 73.8 | $ | 95.2 | $ | 93.8 | $ | 89.2 | $ | 83.9 | ||||||||||
Income from Operations by Source: | ||||||||||||||||||||||||||||
Lincoln Financial Advisors | $ | (8.7 | ) | $ | (5.3 | ) | $ | (3.5 | ) | $ | (0.3 | ) | $ | (7.6 | ) | $ | (4.4 | ) | $ | (4.4 | ) | $ | 3.2 | $ | (3.8 | ) | ||
Lincoln Financial Distributors | (4.6 | ) | (6.4 | ) | (6.3 | ) | (6.3 | ) | (6.0 | ) | (5.4 | ) | (7.9 | ) | (3.5 | ) | (6.0 | ) | ||||||||||
Total Distribution | (13.3 | ) | (11.8 | ) | (9.8 | ) | (6.6 | ) | (13.6 | ) | (9.8 | ) | (12.3 | ) | (0.3 | ) | (9.8 | ) | ||||||||||
Amortization of deferred gain on | ||||||||||||||||||||||||||||
indemnity reinsurance* | 11.6 | 11.7 | 20.8 | 12.4 | 12.3 | 12.3 | 12.3 | 12.3 | 12.2 | |||||||||||||||||||
LNC Financing | (14.6 | ) | (15.7 | ) | (16.0 | ) | (14.6 | ) | (14.6 | ) | (14.5 | ) | (14.2 | ) | (14.4 | ) | (14.0 | ) | ||||||||||
Other Corporate (1) | (4.0 | ) | (4.8 | ) | (5.0 | ) | 2.5 | 4.7 | 21.1 | 11.3 | 9.1 | (3.0 | ) | |||||||||||||||
Income(Loss) from Operations | $ | (20.3 | ) | $ | (20.7 | ) | $ | (9.9 | ) | $ | (6.3 | ) | $ | (11.3 | ) | $ | 9.2 | $ | (2.9 | ) | $ | 6.7 | $ | (14.6 | ) |
* 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 $5.7 million in the 1st quarter of 2005, $23.5 million in the 2nd quarter of 2005, $13.3 million in the 3rd quarter of 2005, $4.3 million in the 4th quarter of 2005, $46.8 million for the full year 2005 and $4.4 million in the 4th quarter of 2004. | |||||||||||
3/31/2006 | PAGE 36 | |||||||||||||||||||||||||||
Restructuring Charges (After-tax) | ||||||||||||||||||||||||||||
Unaudited [Millions of Dollars] | ||||||||||||||||||||||||||||
For the Year Ended December 31 | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||||||||||||||
Lincoln Retirement | $ | (1.3 | ) | $ | (1.0 | ) | $ | (13.1 | ) | $ | (3.5 | ) | $ | (11.3 | ) | |||||||||||||
Life Insurance | (3.5 | ) | - | (12.7 | ) | (3.1 | ) | (3.1 | ) | |||||||||||||||||||
Investment Management | (0.4 | ) | 0.3 | (4.6 | ) | (0.8 | ) | 0.2 | ||||||||||||||||||||
Lincoln UK | - | 1.7 | - | - | - | |||||||||||||||||||||||
Corporate & Other | (19.5 | ) | 1.1 | (4.7 | ) | (6.4 | ) | (4.9 | ) | |||||||||||||||||||
Total | $ | (24.7 | ) | $ | 2.0 | $ | (35.0 | ) | $ | (13.9 | ) | $ | (19.1 | ) | ||||||||||||||
For the Quarter Ended | Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | |||||||||||||||||||
2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | ||||||||||||||||||||
Lincoln Retirement | $ | (1.2 | ) | $ | (1.2 | ) | $ | (1.7 | ) | $ | 0.5 | $ | (0.4 | ) | $ | (10.0 | ) | $ | (0.2 | ) | $ | (0.7 | ) | $ | (0.2 | ) | ||
Life Insurance | (1.8 | ) | (0.4 | ) | (0.6 | ) | (0.4 | ) | (0.6 | ) | (2.4 | ) | (0.1 | ) | 0.0 | (0.0 | ) | |||||||||||
Investment Management | (1.0 | ) | (0.0 | ) | (0.0 | ) | 0.2 | - | 0.2 | - | - | - | ||||||||||||||||
Lincoln UK | - | - | - | - | - | - | - | - | - | |||||||||||||||||||
Corporate & Other | (3.6 | ) | (1.9 | ) | (0.7 | ) | (0.3 | ) | (0.2 | ) | (2.8 | ) | (1.5 | ) | (0.4 | ) | - | |||||||||||
Total | $ | (7.5 | ) | $ | (3.5 | ) | $ | (2.9 | ) | $ | (0.0 | ) | $ | (1.3 | ) | $ | (15.0 | ) | $ | (1.8 | ) | $ | (1.1 | ) | $ | (0.2 | ) |
3/31/2006 | PAGE 37 | |||||||||||||||||||||||||||
Consolidated Domestic Deposits/Account Balances | ||||||||||||||||||||||||||||
Unaudited [Billions of Dollars] | ||||||||||||||||||||||||||||
2001 | 2002 | 2003 | 2004 | 2005 | ||||||||||||||||||||||||
Deposits - For the Year | ||||||||||||||||||||||||||||
Lincoln Retirement - Fixed Annuities | $ | 3.342 | $ | 3.672 | $ | 3.125 | $ | 3.110 | $ | 2.947 | ||||||||||||||||||
Lincoln Retirement - Variable Products(1) | 3.067 | 2.743 | 3.119 | 5.910 | 7.362 | |||||||||||||||||||||||
Lincoln Retirement - Life Insurance | 0.012 | - | - | - | - | |||||||||||||||||||||||
Life Insurance Segment - Life Insurance | 1.934 | 2.138 | 2.259 | 2.243 | 2.240 | |||||||||||||||||||||||
Inv Mgmt - Annuities | 1.701 | 2.751 | 2.151 | 2.757 | 2.957 | |||||||||||||||||||||||
Inv Mgmt - Mutual Funds | 1.523 | 1.829 | 2.315 | 3.235 | 4.860 | |||||||||||||||||||||||
Inv Mgmt - Managed Acct. & Other | 0.469 | 1.115 | 1.116 | 2.999 | 6.239 | |||||||||||||||||||||||
Consolidating Adjustments | (0.608 | ) | (1.576 | ) | (0.864 | ) | (0.975 | ) | (1.111 | ) | ||||||||||||||||||
Total Gross Retail Deposits | 11.439 | 12.671 | 13.222 | 19.280 | 25.494 | |||||||||||||||||||||||
Investment Management Segment- Instit. | 3.826 | 5.194 | 5.859 | 11.289 | 14.633 | |||||||||||||||||||||||
Consolidating Adjustments | (0.207 | ) | (0.232 | ) | (0.150 | ) | (0.089 | ) | (0.086 | ) | ||||||||||||||||||
Total Gross Deposits | $ | 15.058 | $ | 17.634 | $ | 18.931 | $ | 30.479 | $ | 40.041 | ||||||||||||||||||
Account Balances - End of Year | ||||||||||||||||||||||||||||
Lincoln Retirement - Fixed Annuities | $ | 16.491 | $ | 18.085 | $ | 18.868 | $ | 19.268 | $ | 18.856 | ||||||||||||||||||
Lincoln Retirement - Variable Products(1) | 34.638 | 27.438 | 35.786 | 43.223 | 51.373 | |||||||||||||||||||||||
Lincoln Retirement - Life Insurance | 0.149 | - | - | - | - | |||||||||||||||||||||||
Life Insurance Segment - Life Insurance | 11.377 | 12.086 | 13.420 | 14.382 | 15.368 | |||||||||||||||||||||||
Inv Mgmt - Annuities | 11.835 | 9.981 | 12.691 | 14.494 | 16.103 | |||||||||||||||||||||||
Inv Mgmt - Mutual Funds | 11.554 | 10.296 | 12.614 | 13.251 | 15.679 | |||||||||||||||||||||||
Inv Mgmt - Managed Acct. & Other | 1.719 | 2.270 | 3.768 | 6.642 | 12.893 | |||||||||||||||||||||||
Consolidating Adjustments | (6.676 | ) | (5.123 | ) | (6.553 | ) | (7.476 | ) | (8.269 | ) | ||||||||||||||||||
Total Retail Account Balances | 81.088 | 75.033 | 90.593 | 103.784 | 122.004 | |||||||||||||||||||||||
Investment Management Segment- Instit. | 23.305 | 23.948 | 33.722 | 21.643 | 32.420 | |||||||||||||||||||||||
Consolidating Adjustments | (1.211 | ) | (0.924 | ) | (1.183 | ) | (1.248 | ) | (1.166 | ) | ||||||||||||||||||
Total Account Balances | $ | 103.181 | $ | 98.057 | $ | 123.132 | $ | 124.179 | $ | 153.258 | ||||||||||||||||||
Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | ||||||||||||||||||||
2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | ||||||||||||||||||||
Deposits - For the Quarter | ||||||||||||||||||||||||||||
Lincoln Retirement - Fixed Annuities | $ | 0.817 | $ | 0.779 | $ | 0.783 | $ | 0.732 | $ | 0.740 | $ | 0.793 | $ | 0.718 | $ | 0.696 | $ | 0.693 | ||||||||||
Lincoln Retirement - Variable Products(1) | 1.407 | 1.424 | 1.424 | 1.655 | 1.899 | 1.736 | 1.785 | 1.942 | 2.195 | |||||||||||||||||||
Life Insurance Segment - Life Insurance | 0.501 | 0.507 | 0.548 | 0.686 | 0.512 | 0.527 | 0.553 | 0.648 | 0.535 | |||||||||||||||||||
Inv Mgmt - Annuities | 0.753 | 0.668 | 0.600 | 0.737 | 0.735 | 0.655 | 0.752 | 0.815 | 0.918 | |||||||||||||||||||
Inv Mgmt - Mutual Funds | 0.905 | 0.729 | 0.680 | 0.922 | 1.336 | 1.255 | 1.159 | 1.110 | 1.094 | |||||||||||||||||||
Inv Mgmt - Managed Acct. & Other | 0.793 | 0.721 | 0.625 | 0.860 | 1.310 | 2.123 | 1.573 | 1.232 | 1.769 | |||||||||||||||||||
Consolidating Adjustments | (0.271 | ) | (0.180 | ) | (0.223 | ) | (0.302 | ) | (0.282 | ) | (0.230 | ) | (0.343 | ) | (0.255 | ) | (0.214 | ) | ||||||||||
Total Gross Retail Deposits | 4.905 | 4.648 | 4.436 | 5.290 | 6.249 | 6.859 | 6.197 | 6.188 | 6.990 | |||||||||||||||||||
Investment Management Segment- Instit. | 2.623 | 3.331 | 2.584 | 2.750 | 1.787 | 5.852 | 2.777 | 4.217 | 4.783 | |||||||||||||||||||
Consolidating Adjustments | (0.020 | ) | (0.035 | ) | (0.033 | ) | (0.002 | ) | (0.015 | ) | (0.034 | ) | (0.017 | ) | (0.020 | ) | (0.032 | ) | ||||||||||
Total Gross Deposits | $ | 7.509 | $ | 7.945 | $ | 6.988 | $ | 8.038 | $ | 8.021 | $ | 12.677 | $ | 8.958 | $ | 10.386 | $ | 11.740 | ||||||||||
Account Balances - End of Quarter | ||||||||||||||||||||||||||||
Lincoln Retirement - Fixed Annuities | $ | 18.930 | $ | 19.143 | $ | 19.317 | $ | 19.268 | $ | 19.084 | $ | 19.141 | $ | 19.062 | $ | 18.856 | $ | 18.628 | ||||||||||
Lincoln Retirement - Variable Products(1) | 37.619 | 38.398 | 38.698 | 43.223 | 43.673 | 45.751 | 48.731 | 51.373 | 55.072 | |||||||||||||||||||
Life Insurance Segment - Life Insurance | 13.606 | 13.770 | 13.912 | 14.382 | 14.466 | 14.691 | 15.001 | 15.368 | 15.655 | |||||||||||||||||||
Inv Mgmt - Annuities | 13.294 | 13.355 | 13.074 | 14.494 | 14.356 | 14.844 | 15.658 | 16.103 | 17.136 | |||||||||||||||||||
Inv Mgmt - Mutual Funds | 13.199 | 12.971 | 12.234 | 13.251 | 13.478 | 14.385 | 15.173 | 15.679 | 16.583 | |||||||||||||||||||
Inv Mgmt - Managed Acct. & Other | 4.366 | 5.051 | 5.374 | 6.642 | 7.638 | 9.492 | 11.679 | 12.893 | 15.109 | |||||||||||||||||||
Consolidating Adjustments | (6.881 | ) | (6.829 | ) | (7.216 | ) | (7.476 | ) | (7.758 | ) | (8.025 | ) | (7.967 | ) | (8.269 | ) | (8.855 | ) | ||||||||||
Total Retail Account Balances | 94.133 | 95.860 | 95.393 | 103.784 | 104.936 | 110.278 | 117.337 | 122.004 | 129.328 | |||||||||||||||||||
Investment Management Segment- Instit. | 36.216 | 38.268 | 18.396 | 21.643 | 22.551 | 27.243 | 29.979 | 32.420 | 37.197 | |||||||||||||||||||
Consolidating Adjustments | (1.176 | ) | (1.168 | ) | (1.140 | ) | (1.248 | ) | (1.166 | ) | (1.198 | ) | (1.163 | ) | (1.166 | ) | (1.199 | ) | ||||||||||
Total Account Balances | $ | 129.173 | $ | 132.961 | $ | 112.649 | $ | 124.179 | $ | 126.321 | $ | 136.323 | $ | 146.154 | $ | 153.258 | $ | 165.326 | ||||||||||
Total Domestic Net Flows | ||||||||||||||||||||||||||||
Unaudited [Billions of Dollars] | ||||||||||||||||||||||||||||
For the Year | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||||||||||||||
Lincoln Retirement(1) | $ | 0.105 | $ | 0.453 | $ | 1.007 | $ | 2.922 | $ | 2.887 | ||||||||||||||||||
Life Insurance Segment | 1.163 | 1.320 | 1.377 | 1.247 | 1.356 | |||||||||||||||||||||||
Investment Management Segment- Retail | (0.375 | ) | 0.806 | 1.271 | 3.136 | 7.098 | ||||||||||||||||||||||
Consolidating Adjustments | 0.035 | (0.082 | ) | 0.064 | 0.030 | (0.133 | ) | |||||||||||||||||||||
Total Retail Net Flows | 0.927 | 2.496 | 3.719 | 7.335 | 11.207 | |||||||||||||||||||||||
Investment Management Segment- Institutional | (0.231 | ) | 2.106 | 2.478 | 7.178 | 8.861 | ||||||||||||||||||||||
Consolidating Adjustments | (0.015 | ) | 0.005 | (0.002 | ) | 0.031 | 0.170 | |||||||||||||||||||||
Total Net Flows | $ | 0.681 | $ | 4.608 | $ | 6.195 | $ | 14.545 | $ | 20.238 | ||||||||||||||||||
Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | ||||||||||||||||||||
For the Quarter | 2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | |||||||||||||||||||
Lincoln Retirement(1) | $ | 0.712 | $ | 0.701 | $ | 0.716 | $ | 0.794 | $ | 0.776 | $ | 0.857 | $ | 0.633 | $ | 0.621 | $ | 0.858 | ||||||||||
Life Insurance Segment | 0.248 | 0.291 | 0.300 | 0.408 | 0.260 | 0.309 | 0.337 | 0.450 | 0.297 | |||||||||||||||||||
Investment Management Segment- Retail | 0.969 | 0.617 | 0.381 | 1.170 | 1.579 | 2.331 | 1.841 | 1.347 | 1.452 | |||||||||||||||||||
Consolidating Adjustments | (0.096 | ) | 0.060 | (0.089 | ) | 0.154 | (0.021 | ) | 0.006 | (0.049 | ) | (0.069 | ) | 0.057 | ||||||||||||||
Total Retail Net Flows | 1.832 | 1.669 | 1.308 | 2.527 | 2.593 | 3.504 | 2.762 | 2.348 | 2.664 | |||||||||||||||||||
Investment Management Segment- Instit. | 1.661 | 2.043 | 1.379 | 2.095 | 1.217 | 4.108 | 1.606 | 1.930 | 3.551 | |||||||||||||||||||
Consolidating Adjustments | 0.038 | (0.001 | ) | (0.006 | ) | 0.000 | 0.040 | 0.008 | 0.031 | 0.090 | 0.026 | |||||||||||||||||
Total Net Flows | $ | 3.530 | $ | 3.710 | $ | 2.682 | $ | 4.622 | $ | 3.851 | $ | 7.619 | $ | 4.399 | $ | 4.368 | $ | 6.241 | ||||||||||
(1) Includes amounts attributable to Alliance program mutual fund net flows. Account values for the Alliance program are not included in the separate accounts reported on our balance sheet. | ||||||||||||||||||||||||||||
Amounts for the Investment Management segment exclude amounts reported as Assets Under Management - Insurance-related Assets. |
3/31/2006 | PAGE 37A | ||||||||||||||||||||||||||||||||||||
Consolidated Domestic Deposits/Account Balances (excluding Assets | |||||||||||||||||||||||||||||||||||||
Managed by Delaware's London-based International Investment Unit) | |||||||||||||||||||||||||||||||||||||
Unaudited [Billions of Dollars] | |||||||||||||||||||||||||||||||||||||
2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||||||||||||||||||||||||
Deposits - For the Year | |||||||||||||||||||||||||||||||||||||
Lincoln Retirement - Fixed Annuities | $ | 3.342 | $ | 3.672 | $ | 3.125 | $ | 3.110 | $ | 2.947 | |||||||||||||||||||||||||||
Lincoln Retirement - Variable Products(1) | 3.067 | 2.743 | 3.119 | 5.910 | 7.362 | ||||||||||||||||||||||||||||||||
Lincoln Retirement - Life Insurance | 0.012 | - | - | - | - | ||||||||||||||||||||||||||||||||
Life Insurance Segment - Life Insurance | 1.934 | 2.138 | 2.259 | 2.243 | 2.240 | ||||||||||||||||||||||||||||||||
Inv Mgmt - Annuities | 1.701 | 2.456 | 2.140 | 2.752 | 2.957 | ||||||||||||||||||||||||||||||||
Inv Mgmt - Mutual Funds | 1.523 | 1.829 | 2.315 | 3.235 | 4.860 | ||||||||||||||||||||||||||||||||
Inv Mgmt - Managed Acct. & Other | 0.469 | 1.115 | 1.116 | 2.999 | 6.239 | ||||||||||||||||||||||||||||||||
Consolidating Adjustments | (0.608 | ) | (1.576 | ) | (0.864 | ) | (0.975 | ) | (1.111 | ) | |||||||||||||||||||||||||||
Total Gross Retail Deposits | 11.439 | 12.376 | 13.210 | 19.274 | 25.494 | ||||||||||||||||||||||||||||||||
Investment Management Segment- Instit. | 1.943 | 3.709 | 3.320 | 6.637 | 14.633 | ||||||||||||||||||||||||||||||||
Consolidating Adjustments | (0.207 | ) | (0.232 | ) | (0.150 | ) | (0.089 | ) | (0.086 | ) | |||||||||||||||||||||||||||
Total Gross Deposits | $ | 13.175 | $ | 13.175 | $ | 16.380 | $ | 25.822 | $ | 40.041 | |||||||||||||||||||||||||||
Account Balances - End of Year | |||||||||||||||||||||||||||||||||||||
Lincoln Retirement - Fixed Annuities | $ | 16.491 | $ | 18.085 | $ | 18.868 | $ | 19.268 | $ | 18.856 | |||||||||||||||||||||||||||
Lincoln Retirement - Variable Products(1) | 34.638 | 27.438 | 35.786 | 43.223 | 51.373 | ||||||||||||||||||||||||||||||||
Lincoln Retirement - Life Insurance | 0.149 | - | - | - | - | ||||||||||||||||||||||||||||||||
Life Insurance Segment - Life Insurance | 11.377 | 12.086 | 13.420 | 14.382 | 15.368 | ||||||||||||||||||||||||||||||||
Inv Mgmt - Annuities | 11.835 | 9.688 | 12.368 | 14.494 | 16.103 | ||||||||||||||||||||||||||||||||
Inv Mgmt - Mutual Funds | 11.554 | 10.296 | 12.614 | 13.251 | 15.679 | ||||||||||||||||||||||||||||||||
Inv Mgmt - Managed Acct. & Other | 1.719 | 2.270 | 3.768 | 6.642 | 12.893 | ||||||||||||||||||||||||||||||||
Consolidating Adjustments | (6.676 | ) | (5.123 | ) | (6.553 | ) | (7.476 | ) | (8.269 | ) | |||||||||||||||||||||||||||
Total Retail Account Balances | 81.088 | 74.741 | 90.271 | 103.784 | 122.004 | ||||||||||||||||||||||||||||||||
Investment Management Segment- Instit. | 11.562 | 12.348 | 16.299 | 21.643 | 32.420 | ||||||||||||||||||||||||||||||||
Consolidating Adjustments | (1.211 | ) | (0.924 | ) | (1.183 | ) | (1.248 | ) | (1.166 | ) | |||||||||||||||||||||||||||
Total Account Balances | $ | 91.439 | $ | 86.165 | $ | 105.387 | $ | 124.179 | $ | 153.258 | |||||||||||||||||||||||||||
Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | ||||||||||||||||||||||||||
2003 | 2003 | 2003 | 2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | ||||||||||||||||||||||||||
Deposits - For the Quarter | |||||||||||||||||||||||||||||||||||||
Lincoln Retirement - Fixed Annuities | $ | 0.778 | $ | 0.778 | $ | 0.792 | $ | 0.817 | $ | 0.779 | $ | 0.783 | $ | 0.732 | $ | 0.740 | $ | 0.793 | $ | 0.718 | $ | 0.696 | $ | 0.693 | |||||||||||||
Lincoln Retirement - Variable Products(1) | 0.584 | 0.800 | 1.087 | 1.407 | 1.424 | 1.424 | 1.655 | 1.899 | 1.736 | 1.785 | 1.942 | 2.195 | |||||||||||||||||||||||||
Life Insurance Segment - Life Insurance | 0.526 | 0.586 | 0.661 | 0.501 | 0.507 | 0.548 | 0.686 | 0.512 | 0.527 | 0.553 | 0.648 | 0.535 | |||||||||||||||||||||||||
Inv Mgmt - Annuities | 0.526 | 0.570 | 0.560 | 0.751 | 0.666 | 0.598 | 0.737 | 0.735 | 0.655 | 0.752 | 0.815 | 0.918 | |||||||||||||||||||||||||
Inv Mgmt - Mutual Funds | 0.558 | 0.644 | 0.663 | 0.905 | 0.729 | 0.680 | 0.922 | 1.336 | 1.255 | 1.159 | 1.110 | 1.094 | |||||||||||||||||||||||||
Inv Mgmt - Managed Acct. & Other | 0.196 | 0.277 | 0.441 | 0.793 | 0.721 | 0.625 | 0.860 | 1.310 | 2.123 | 1.573 | 1.232 | 1.769 | |||||||||||||||||||||||||
Consolidating Adjustments | (0.211 | ) | (0.288 | ) | (0.193 | ) | (0.271 | ) | (0.180 | ) | (0.223 | ) | (0.302 | ) | (0.282 | ) | (0.230 | ) | (0.343 | ) | (0.255 | ) | (0.214 | ) | |||||||||||||
Total Gross Retail Deposits | 2.958 | 3.367 | 4.010 | 4.903 | 4.646 | 4.435 | 5.290 | 6.249 | 6.859 | 6.197 | 6.188 | 6.990 | |||||||||||||||||||||||||
Investment Management Segment- Instit. | 0.466 | 1.088 | 0.874 | 1.206 | 1.372 | 1.309 | 2.750 | 1.787 | 5.852 | 2.777 | 4.217 | 4.783 | |||||||||||||||||||||||||
Consolidating Adjustments | (0.025 | ) | (0.025 | ) | (0.047 | ) | (0.020 | ) | (0.035 | ) | (0.033 | ) | (0.002 | ) | (0.015 | ) | (0.034 | ) | (0.017 | ) | (0.020 | ) | (0.032 | ) | |||||||||||||
Total Gross Deposits | $ | 3.400 | $ | 4.430 | $ | 4.837 | $ | 6.090 | $ | 5.983 | $ | 5.711 | $ | 8.038 | $ | 8.021 | $ | 12.677 | $ | 8.958 | $ | 10.386 | $ | 11.740 | |||||||||||||
Account Balances - End of Quarter | |||||||||||||||||||||||||||||||||||||
Lincoln Retirement - Fixed Annuities | $ | 18.696 | $ | 18.868 | $ | 18.868 | $ | 18.930 | $ | 19.143 | $ | 19.317 | $ | 19.268 | $ | 19.084 | $ | 19.141 | $ | 19.062 | $ | 18.856 | $ | 18.628 | |||||||||||||
Lincoln Retirement - Variable Products(1) | 30.457 | 31.709 | 35.786 | 37.619 | 38.398 | 38.698 | 43.223 | 43.673 | 45.751 | 48.731 | 51.373 | 55.072 | |||||||||||||||||||||||||
Life Insurance Segment - Life Insurance | 12.663 | 12.958 | 13.420 | 13.606 | 13.770 | 13.912 | 14.382 | 14.466 | 14.691 | 15.001 | 15.368 | 15.655 | |||||||||||||||||||||||||
Inv Mgmt - Annuities | 10.718 | 11.104 | 12.368 | 12.973 | 13.037 | 13.074 | 14.494 | 14.356 | 14.844 | 15.658 | 16.103 | 17.136 | |||||||||||||||||||||||||
Inv Mgmt - Mutual Funds | 11.356 | 11.615 | 12.614 | 13.199 | 12.971 | 12.234 | 13.251 | 13.478 | 14.385 | 15.173 | 15.679 | 16.583 | |||||||||||||||||||||||||
Inv Mgmt - Managed Acct. & Other | 2.737 | 3.037 | 3.768 | 4.366 | 5.051 | 5.374 | 6.642 | 7.638 | 9.492 | 11.679 | 12.893 | 15.109 | |||||||||||||||||||||||||
Consolidating Adjustments | (5.628 | ) | (5.792 | ) | (6.553 | ) | (6.881 | ) | (6.829 | ) | (7.216 | ) | (7.476 | ) | (7.758 | ) | (8.025 | ) | (7.967 | ) | (8.269 | ) | (8.855 | ) | |||||||||||||
Total Retail Account Balances | 80.999 | 83.499 | 90.271 | 93.812 | 95.542 | 95.393 | 103.784 | 104.936 | 110.278 | 117.337 | 122.004 | 129.328 | |||||||||||||||||||||||||
Investment Management Segment- Instit. | 13.943 | 14.660 | 16.299 | 17.215 | 17.414 | 18.396 | 21.643 | 22.551 | 27.243 | 27.243 | 32.420 | 37.197 | |||||||||||||||||||||||||
Consolidating Adjustments | (1.049 | ) | (1.044 | ) | (1.183 | ) | (1.176 | ) | (1.168 | ) | (1.140 | ) | (1.248 | ) | (1.166 | ) | (1.198 | ) | (1.163 | ) | (1.166 | ) | (1.199 | ) | |||||||||||||
Total Account Balances | $ | 93.894 | $ | 97.115 | $ | 105.387 | $ | 109.851 | $ | 111.789 | $ | 112.649 | $ | 124.179 | $ | 126.321 | $ | 136.323 | $ | 143.417 | $ | 153.258 | $ | 165.326 | |||||||||||||
Total Domestic Net Flows (excluding Assets | |||||||||||||||||||||||||||||||||||||
Managed by Delaware's London-based International Investment Unit) | |||||||||||||||||||||||||||||||||||||
For the Year | 2001 | 2002 | 2003 | 2004 | 2005 | ||||||||||||||||||||||||||||||||
Lincoln Retirement(1) | 0.105 | 0.453 | 1.007 | 2.922 | 2.887 | ||||||||||||||||||||||||||||||||
Life Insurance Segment | 1.163 | 1.320 | 1.377 | 1.247 | 1.356 | ||||||||||||||||||||||||||||||||
Investment Management Segment- Retail | (0.375 | ) | 0.517 | 1.325 | 3.160 | 7.098 | |||||||||||||||||||||||||||||||
Consolidating Adjustments | 0.035 | (0.082 | ) | 0.064 | 0.030 | (0.133 | ) | ||||||||||||||||||||||||||||||
Total Retail Net Flows | 0.927 | 2.207 | 3.773 | 7.359 | 11.207 | ||||||||||||||||||||||||||||||||
Investment Management Segment- Institutional | (0.925 | ) | 1.885 | 1.433 | 3.884 | 8.861 | |||||||||||||||||||||||||||||||
Consolidating Adjustments | (0.015 | ) | 0.005 | (0.002 | ) | 0.031 | 0.170 | ||||||||||||||||||||||||||||||
Total Net Flows | $ | (0.013 | ) | $ | 4.097 | $ | 5.203 | $ | 11.274 | $ | 20.238 | ||||||||||||||||||||||||||
Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | ||||||||||||||||||||||||||
For the Quarter | 2003 | 2003 | 2003 | 2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | |||||||||||||||||||||||||
Lincoln Retirement(1) | $ | 0.099 | $ | 0.277 | $ | 0.536 | $ | 0.712 | $ | 0.701 | $ | 0.716 | $ | 0.794 | $ | 0.776 | $ | 0.857 | $ | 0.633 | $ | 0.621 | $ | 0.858 | |||||||||||||
Life Insurance Segment | 0.324 | 0.355 | 0.402 | 0.248 | 0.291 | 0.300 | 0.408 | 0.260 | 0.309 | 0.337 | 0.450 | 0.297 | |||||||||||||||||||||||||
Investment Management Segment- Retail | 0.304 | 0.375 | 0.598 | 0.980 | 0.624 | 0.386 | 1.170 | 1.579 | 2.331 | 1.841 | 1.347 | 1.452 | |||||||||||||||||||||||||
Consolidating Adjustments | (0.003 | ) | (0.038 | ) | (0.058 | ) | (0.096 | ) | 0.060 | (0.089 | ) | 0.154 | (0.021 | ) | 0.006 | (0.049 | ) | (0.069 | ) | 0.057 | |||||||||||||||||
Total Retail Net Flows | 0.725 | 0.970 | 1.478 | 1.843 | 1.676 | 1.313 | 2.527 | 2.593 | 3.504 | 2.762 | 2.348 | 2.664 | |||||||||||||||||||||||||
Investment Management Segment- Instit. | (0.016 | ) | 0.430 | 0.457 | 0.560 | 0.379 | 0.850 | 2.095 | 1.217 | 4.108 | 1.606 | 1.930 | 3.551 | ||||||||||||||||||||||||
Consolidating Adjustments | 0.009 | 0.035 | (0.017 | ) | 0.038 | (0.001 | ) | (0.006 | ) | 0.000 | 0.040 | 0.008 | 0.031 | 0.090 | 0.026 | ||||||||||||||||||||||
Total Net Flows | $ | 0.718 | $ | 1.435 | $ | 1.918 | $ | 2.441 | $ | 2.054 | $ | 2.157 | $ | 4.622 | $ | 3.851 | $ | 7.619 | $ | 4.399 | $ | 4.368 | $ | 6.241 | |||||||||||||
(1) Includes amounts attributable to Alliance program mutual fund net flows. Account values for the Alliance program are not included in the separate accounts reported on our balance sheet. | ||||||||||||||
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. | ||||||||||||||
Amounts for the Investment Management segment exclude amounts reported as Assets Under Management - Insurance-related Assets. |
3/31/2006 | PAGE 38 | |||||||||||||||||||||||||||
Consolidated Investment Data - Assets Managed | ||||||||||||||||||||||||||||
Unaudited [Billions of Dollars] | ||||||||||||||||||||||||||||
For the Year Ended December 31 | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||||||||||||||
Assets Managed by Source | ||||||||||||||||||||||||||||
LNC's Investments and Cash | ||||||||||||||||||||||||||||
Fixed maturity securities - available for sale | $ | 28.346 | $ | 32.767 | $ | 32.769 | $ | 34.701 | $ | 33.443 | ||||||||||||||||||
Equity securities - available for sale | 0.470 | 0.337 | 0.199 | 0.161 | 0.145 | |||||||||||||||||||||||
Trading securities | - | - | 3.120 | 3.237 | 3.246 | |||||||||||||||||||||||
Other investments | 7.297 | 6.895 | 6.689 | 6.408 | 6.334 | |||||||||||||||||||||||
Total LNC Investments | 36.113 | 40.000 | 42.778 | 44.507 | 43.168 | |||||||||||||||||||||||
Separate accounts | 44.833 | 36.178 | 46.565 | 55.205 | 63.747 | |||||||||||||||||||||||
Cash and invested cash | 3.095 | 1.691 | 1.711 | 1.662 | 2.312 | |||||||||||||||||||||||
Total LNC | 84.042 | 77.869 | 91.054 | 101.374 | 109.227 | |||||||||||||||||||||||
Non-affiliate assets managed | 38.421 | 38.052 | 49.587 | 42.966 | 62.491 | |||||||||||||||||||||||
Total Assets Managed | $ | 122.463 | $ | 115.921 | $ | 140.641 | $ | 144.340 | $ | 171.718 | ||||||||||||||||||
Assets Managed by Advisor | ||||||||||||||||||||||||||||
Investment Management segment | $ | 48.412 | $ | 46.495 | $ | 62.794 | $ | 56.029 | $ | 77.093 | ||||||||||||||||||
(See page 30 for additional detail) | ||||||||||||||||||||||||||||
DLIA-Corp | 38.119 | 41.104 | 43.024 | 43.980 | 44.483 | |||||||||||||||||||||||
(Assets managed internally-see page 30) | ||||||||||||||||||||||||||||
Lincoln UK | 6.847 | 6.351 | 7.668 | 8.599 | 8.562 | |||||||||||||||||||||||
Policy Loans (within business units) | 1.940 | 1.946 | 1.924 | 1.871 | 1.862 | |||||||||||||||||||||||
Non-LNC Affiliates | 27.145 | 20.026 | 25.231 | 33.862 | 39.718 | |||||||||||||||||||||||
Total Assets Managed | $ | 122.463 | $ | 115.921 | $ | 140.641 | $ | 144.340 | $ | 171.718 | ||||||||||||||||||
Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | ||||||||||||||||||||
For the Quarter Ended | 2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | |||||||||||||||||||
Assets Managed by Source | ||||||||||||||||||||||||||||
LNC's Investments and Cash: | ||||||||||||||||||||||||||||
Fixed maturity securities - | ||||||||||||||||||||||||||||
available for sale | $ | 33.667 | $ | 32.808 | $ | 34.223 | $ | 34.701 | $ | 34.225 | $ | 34.975 | $ | 34.325 | $ | 33.443 | $ | 32.893 | ||||||||||
Equity securities - available for sale | 0.198 | 0.183 | 0.178 | 0.161 | 0.155 | 0.155 | 0.152 | 0.145 | 0.176 | |||||||||||||||||||
Trading securities | 3.191 | 3.088 | 3.224 | 3.237 | 3.207 | 3.345 | 3.287 | 3.246 | 3.190 | |||||||||||||||||||
Other investments | 6.446 | 6.284 | 6.302 | 6.408 | 6.396 | 6.389 | 6.322 | 6.334 | 6.314 | |||||||||||||||||||
Total LNC Investments | 43.502 | 42.362 | 43.927 | 44.507 | 43.982 | 44.863 | 44.085 | 43.168 | 42.573 | |||||||||||||||||||
Separate accounts | 48.558 | 49.344 | 49.658 | 55.205 | 55.387 | 57.240 | 60.812 | 63.747 | 67.984 | |||||||||||||||||||
Cash and invested cash | 2.256 | 2.214 | 1.996 | 1.662 | 1.499 | 1.659 | 1.602 | 2.312 | 1.974 | |||||||||||||||||||
Total LNC | 94.315 | 93.920 | 95.580 | 101.374 | 100.868 | 103.762 | 106.498 | 109.227 | 112.531 | |||||||||||||||||||
Non-affiliate assets managed | 54.977 | 57.361 | 37.060 | 42.966 | 44.618 | 52.199 | 58.473 | 62.491 | 70.428 | |||||||||||||||||||
Total Assets Managed | $ | 149.292 | $ | 151.281 | $ | 132.640 | $ | 144.340 | $ | 145.487 | $ | 155.961 | $ | 164.972 | $ | 171.718 | $ | 182.959 | ||||||||||
Assets Managed by Advisor | ||||||||||||||||||||||||||||
Investment Management segment | $ | 67.075 | $ | 69.643 | $ | 49.076 | $ | 56.029 | $ | 58.022 | $ | 65.963 | $ | 72.488 | $ | 77.093 | $ | 86.021 | ||||||||||
(See page 31 for additional detail) | ||||||||||||||||||||||||||||
DLIA-Corp | 44.006 | 42.528 | 44.047 | 43.980 | 44.210 | 45.219 | 44.503 | 44.483 | 43.430 | |||||||||||||||||||
(Assets managed internally-see page 31) | ||||||||||||||||||||||||||||
Lincoln UK | 7.837 | 7.763 | 7.768 | 8.599 | 8.578 | 8.278 | 8.518 | 8.562 | 8.986 | |||||||||||||||||||
Policy Loans (within business units) | 1.877 | 1.871 | 1.872 | 1.871 | 1.860 | 1.867 | 1.856 | 1.862 | 1.860 | |||||||||||||||||||
Non-LNC Affiliates | 28.497 | 29.476 | 29.877 | 33.862 | 32.816 | 34.635 | 37.605 | 39.718 | 42.661 | |||||||||||||||||||
Total Assets Managed | $ | 149.292 | $ | 151.281 | $ | 132.640 | $ | 144.340 | $ | 145.487 | $ | 155.961 | $ | 164.972 | $ | 171.718 | $ | 182.959 |
3/31/2006 | PAGE 38A | ||||||||||||||||||||||||||||||||||||
Consolidated Investment Data - Assets Managed (excluding Assets & #160; | |||||||||||||||||||||||||||||||||||||
Managed by Delaware's London-based International Investment Unit) 160; | |||||||||||||||||||||||||||||||||||||
Unaudited [Billions of Dollars] | |||||||||||||||||||||||||||||||||||||
For the Year Ended December 31 | 2001 | 2002 | 2003 | 2004 | 2005 | ||||||||||||||||||||||||||||||||
Assets Managed by Source | |||||||||||||||||||||||||||||||||||||
LNC's Investments and Cash | |||||||||||||||||||||||||||||||||||||
Fixed maturity securities - available for sale | $ | 28.346 | $ | 32.767 | $ | 32.769 | $ | 34.701 | $ | 33.443 | |||||||||||||||||||||||||||
Equity securities - available for sale | 0.470 | 0.337 | 0.199 | 0.161 | 0.145 | ||||||||||||||||||||||||||||||||
Trading securities | - | - | 3.120 | 3.237 | 3.246 | ||||||||||||||||||||||||||||||||
Other investments | 7.297 | 6.895 | 6.689 | 6.408 | 6.334 | ||||||||||||||||||||||||||||||||
Total LNC Investments | 36.113 | 40.000 | 42.778 | 44.507 | 43.168 | ||||||||||||||||||||||||||||||||
Separate accounts | 44.833 | 36.178 | 46.565 | 55.205 | 63.747 | ||||||||||||||||||||||||||||||||
Cash and invested cash | 3.095 | 1.691 | 1.711 | 1.662 | 2.312 | ||||||||||||||||||||||||||||||||
Total LNC | 84.042 | 77.869 | 91.054 | 101.374 | 109.227 | ||||||||||||||||||||||||||||||||
Non-affiliate assets managed | 26.679 | 26.159 | 31.842 | 42.966 | 62.491 | ||||||||||||||||||||||||||||||||
Total Assets Managed | $ | 110.721 | $ | 104.028 | $ | 122.896 | $ | 144.340 | $ | 171.718 | |||||||||||||||||||||||||||
Assets Managed by Advisor | |||||||||||||||||||||||||||||||||||||
Investment Management segment | $ | 36.670 | $ | 34.602 | $ | 45.049 | $ | 56.029 | $ | 77.093 | |||||||||||||||||||||||||||
(See page 30A for additional detail) | |||||||||||||||||||||||||||||||||||||
DLIA-Corp | 38.119 | 41.104 | 43.024 | 43.980 | 44.483 | ||||||||||||||||||||||||||||||||
(Assets managed internally-see page 30A) | |||||||||||||||||||||||||||||||||||||
Lincoln UK | 6.847 | 6.351 | 7.668 | 8.599 | 8.562 | ||||||||||||||||||||||||||||||||
Policy Loans (within business units) | 1.940 | 1.946 | 1.924 | 1.871 | 1.862 | ||||||||||||||||||||||||||||||||
Non-LNC Affiliates | 27.145 | 20.026 | 25.231 | 33.862 | 39.718 | ||||||||||||||||||||||||||||||||
Total Assets Managed | $ | 110.721 | $ | 104.028 | $ | 122.896 | $ | 144.340 | $ | 171.718 | |||||||||||||||||||||||||||
Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | ||||||||||||||||||||||||||
For the Quarter Ended | 2003 | 2003 | 2003 | 2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | |||||||||||||||||||||||||
Assets Managed by Source | |||||||||||||||||||||||||||||||||||||
LNC's Investments and Cash: | |||||||||||||||||||||||||||||||||||||
Fixed maturity securities - | |||||||||||||||||||||||||||||||||||||
available for sale | $ | 35.355 | $ | 35.384 | $ | 32.769 | $ | 33.667 | $ | 32.808 | $ | 34.223 | $ | 34.701 | $ | 34.225 | $ | 34.975 | $ | 34.325 | $ | 33.443 | $ | 32.893 | |||||||||||||
Equity securities - available for sale | 0.257 | 0.243 | 0.199 | 0.198 | 0.183 | 0.178 | 0.161 | 0.155 | 0.155 | 0.152 | 0.145 | 0.176 | |||||||||||||||||||||||||
Trading securities | - | - | 3.120 | 3.191 | 3.088 | 3.224 | 3.237 | 3.207 | 3.345 | 3.287 | 3.246 | 3.190 | |||||||||||||||||||||||||
Other investments | 6.980 | 6.796 | 6.689 | 6.446 | 6.284 | 6.302 | 6.408 | 6.396 | 6.389 | 6.322 | 6.334 | 6.314 | |||||||||||||||||||||||||
Total LNC Investments | 42.592 | 42.423 | 42.778 | 43.502 | 42.362 | 43.927 | 44.507 | 43.982 | 44.863 | 44.085 | 43.168 | 42.573 | |||||||||||||||||||||||||
Separate accounts | 39.943 | 41.283 | 46.565 | 48.558 | 49.344 | 49.658 | 55.205 | 55.387 | 57.240 | 60.812 | 63.747 | 67.984 | |||||||||||||||||||||||||
Cash and invested cash | 1.946 | 1.961 | 1.711 | 2.256 | 2.214 | 1.996 | 1.662 | 1.499 | 1.659 | 1.602 | 2.312 | 1.974 | |||||||||||||||||||||||||
Total LNC | 84.480 | 85.667 | 91.054 | 94.315 | 93.920 | 95.580 | 101.374 | 100.868 | 103.762 | 106.498 | 109.227 | 112.531 | |||||||||||||||||||||||||
Non-affiliate assets managed | 29.216 | 30.463 | 31.842 | 35.655 | 36.190 | 37.060 | 42.966 | 44.618 | 52.199 | 58.473 | 62.491 | 70.428 | |||||||||||||||||||||||||
Total Assets Managed | $ | 113.696 | $ | 116.131 | $ | 122.896 | $ | 129.970 | $ | 130.110 | $ | 132.641 | $ | 144.340 | $ | 145.486 | $ | 155.961 | $ | 164.972 | $ | 171.718 | $ | 182.959 | |||||||||||||
Assets Managed by Advisor | |||||||||||||||||||||||||||||||||||||
Investment Management segment | $ | 38.755 | $ | 40.416 | $ | 45.049 | $ | 47.753 | $ | 48.471 | $ | 49.076 | $ | 56.029 | $ | 58.022 | $ | 65.963 | $ | 72.488 | $ | 77.093 | $ | 86.021 | |||||||||||||
(See page 31A for additional detail) | |||||||||||||||||||||||||||||||||||||
DLIA-Corp | 43.857 | 42.984 | 43.024 | 44.006 | 42.528 | 44.047 | 43.980 | 44.210 | 45.219 | 44.503 | 44.483 | 43.430 | |||||||||||||||||||||||||
(Assets managed internally-see page 31A) | |||||||||||||||||||||||||||||||||||||
Lincoln UK | 6.726 | 6.887 | 7.668 | 7.837 | 7.763 | 7.768 | 8.599 | 8.578 | 8.278 | 8.518 | 8.562 | 8.986 | |||||||||||||||||||||||||
Policy Loans (within business units) | 1.920 | 1.910 | 1.924 | 1.877 | 1.871 | 1.872 | 1.871 | 1.860 | 1.867 | 1.856 | 1.862 | 1.860 | |||||||||||||||||||||||||
Non-LNC Affiliates | 22.439 | 23.933 | 25.231 | 28.497 | 29.476 | 29.878 | 33.862 | 32.816 | 34.635 | 37.605 | 39.718 | 42.661 | |||||||||||||||||||||||||
Total Assets Managed | $ | 113.696 | $ | 116.131 | $ | 122.896 | $ | 129.970 | $ | 130.110 | $ | 132.641 | $ | 144.340 | $ | 145.486 | $ | 155.961 | $ | 164.972 | $ | 171.718 | $ | 182.959 |
NOTE: 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. |
3/31/2006 | PAGE 39 | |||||||||||||||||||||||||||
Consolidated Investment Data | ||||||||||||||||||||||||||||
Unaudited [Millions of Dollars] | ||||||||||||||||||||||||||||
For the Year Ended December 31 | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||||||||||||||
Net Investment Income | ||||||||||||||||||||||||||||
Fixed maturity AFS securities | $ | 2,121.0 | $ | 2,117.0 | $ | 2,113.2 | $ | 2,005.7 | $ | 2,030.5 | ||||||||||||||||||
Equity AFS securities | 17.6 | 15.4 | 12.3 | 10.9 | 9.6 | |||||||||||||||||||||||
Trading securities | - | - | 46.5 | 193.5 | 193.7 | |||||||||||||||||||||||
Mortgage loans on real estate | 374.5 | 356.8 | 338.3 | 350.1 | 287.6 | |||||||||||||||||||||||
Real estate | 49.5 | 47.4 | 43.9 | 26.9 | 50.1 | |||||||||||||||||||||||
Policy loans | 125.3 | 134.5 | 123.2 | 119.8 | 118.4 | |||||||||||||||||||||||
Invested cash | 68.4 | 37.6 | 7.8 | 32.2 | 63.0 | |||||||||||||||||||||||
Other investments | 69.4 | 16.3 | 48.8 | 55.3 | 61.1 | |||||||||||||||||||||||
Investment revenue | 2,825.9 | 2,725.0 | 2,734.0 | 2,794.4 | 2,813.9 | |||||||||||||||||||||||
Investment expense | (117.1 | ) | (93.1 | ) | (95.4 | ) | (90.3 | ) | (111.6 | ) | ||||||||||||||||||
Net Investment Income | 2,708.7 | 2,631.9 | 2,638.5 | 2,704.1 | 2,702.3 | |||||||||||||||||||||||
Gross-up of Tax Exempt Income | 7.2 | 7.5 | 7.7 | 7.7 | 7.1 | |||||||||||||||||||||||
Adjusted Net Investment Income | $ | 2,715.9 | $ | 2,639.4 | $ | 2,646.2 | $ | 2,711.8 | $ | 2,709.4 | ||||||||||||||||||
Mean Invested Assets (Amortized Cost) | $ | 37,616.9 | $ | 38,828.5 | $ | 41,042.8 | $ | 43,216.4 | $ | 43,933.3 | ||||||||||||||||||
Ratio of Adjusted Net Invest Income | ||||||||||||||||||||||||||||
Over Mean Invested Assets | 7.22 | % | 6.80 | % | 6.45 | % | 6.27 | % | 6.17 | % | ||||||||||||||||||
Investment Gains (Losses) | ||||||||||||||||||||||||||||
Realized Gains (Losses) on Investments | $ | (68.7 | ) | $ | (177.2 | ) | $ | (11.0 | ) | $ | (30.0 | ) | $ | (14.5 | ) | |||||||||||||
Gains(Losses) on Derivatives | (4.9 | ) | 0.8 | (1.6 | ) | (7.4 | ) | (0.0 | ) | |||||||||||||||||||
Incr (Decr) in Unreal Gains on Sec | ||||||||||||||||||||||||||||
Avail-for-Sale (after DAC/Tax) | 183.7 | 557.7 | 39.8 | 29.8 | (326.3 | ) | ||||||||||||||||||||||
Incr (Decr) on Derivatives | 21.4 | 24.4 | (6.3 | ) | (8.1 | ) | (6.7 | ) | ||||||||||||||||||||
Available-for-Sale and Trading Securities | ||||||||||||||||||||||||||||
[Billions of Dollars] | ||||||||||||||||||||||||||||
Fixed Maturity Sec (Fair Value) | 28.346 | 32.767 | 35.887 | 37.936 | 36.687 | |||||||||||||||||||||||
Fixed Maturity Sec (Amortized Cost) | 27.956 | 31.103 | 33.743 | 35.692 | 35.348 | |||||||||||||||||||||||
Equity Securities (Fair Value) | 0.470 | 0.337 | 0.201 | 0.163 | 0.147 | |||||||||||||||||||||||
Equity Securities (Amortized Cost) | 0.444 | 0.334 | 0.176 | 0.148 | 0.139 | |||||||||||||||||||||||
% of AFS Fixed Maturity Securities (Based on Fair Value) | ||||||||||||||||||||||||||||
Treasuries and AAA | 17.2 | % | 20.1 | % | 22.8 | % | 23.5 | % | 23.4 | % | ||||||||||||||||||
AA or better | 23.6 | % | 25.8 | % | 29.3 | % | 29.9 | % | 30.9 | % | ||||||||||||||||||
BB or less | 8.3 | % | 6.6 | % | 6.8 | % | 7.0 | % | 7.4 | % | ||||||||||||||||||
Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | ||||||||||||||||||||
For the Quarter Ended | 2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | |||||||||||||||||||
Net Investment Income | ||||||||||||||||||||||||||||
Fixed maturity AFS securities | $ | 493.0 | $ | 496.4 | $ | 501.5 | $ | 514.8 | $ | 505.1 | $ | 509.8 | $ | 505.7 | $ | 509.7 | $ | 513.7 | ||||||||||
Equity AFS securities | 2.4 | 2.0 | 2.2 | 4.4 | 1.8 | 2.0 | 2.4 | 3.3 | 2.1 | |||||||||||||||||||
Trading securities | 47.5 | 48.6 | 47.7 | 49.7 | 47.6 | 48.8 | 48.6 | 48.7 | 49.7 | |||||||||||||||||||
Mortgage loans on real estate | 100.4 | 92.1 | 83.8 | 73.8 | 70.9 | 70.7 | 70.9 | 75.1 | 67.2 | |||||||||||||||||||
Real estate | 7.6 | 5.9 | 8.0 | 5.4 | 4.3 | 31.7 | 8.5 | 5.6 | 9.1 | |||||||||||||||||||
Policy loans | 29.2 | 29.6 | 29.7 | 31.3 | 29.6 | 29.8 | 29.8 | 29.2 | 29.7 | |||||||||||||||||||
Invested cash | 3.5 | 5.2 | 5.6 | 17.9 | 12.7 | 14.0 | 17.0 | 19.2 | 22.8 | |||||||||||||||||||
Other investments | 15.0 | 23.8 | 14.0 | 2.4 | 13.5 | 24.2 | 16.4 | 7.0 | 14.6 | |||||||||||||||||||
Investment revenue | 698.6 | 703.6 | 692.4 | 699.8 | 685.6 | 731.1 | 699.3 | 697.9 | 708.8 | |||||||||||||||||||
Investment expense | (21.0 | ) | (20.5 | ) | (23.0 | ) | (25.7 | ) | (25.8 | ) | (27.5 | ) | (28.5 | ) | (29.8 | ) | (30.4 | ) | ||||||||||
Net Investment Income | 677.5 | 683.1 | 669.4 | 674.1 | 659.8 | 703.6 | 670.8 | 668.1 | 678.3 | |||||||||||||||||||
Gross-up of Tax Exempt Income | 1.7 | 1.6 | 1.7 | 2.6 | 1.6 | 1.6 | 1.8 | 2.1 | 1.5 | |||||||||||||||||||
Adjusted Net Invest Income | $ | 679.3 | $ | 684.8 | $ | 671.1 | $ | 676.6 | $ | 661.4 | $ | 705.2 | $ | 672.6 | $ | 670.2 | $ | 679.9 | ||||||||||
Mean Invested Assets (Amortized Cost) | $ | 42,615.7 | $ | 42,987.4 | $ | 43,499.3 | $ | 43,763.4 | $ | 43,851.9 | $ | 43,806.2 | $ | 44,040.1 | $ | 44,035.2 | $ | 44,363.6 | ||||||||||
Ratio of Adjusted Net Invest Inc | ||||||||||||||||||||||||||||
Over Mean Invested Assets | 6.38 | % | 6.37 | % | 6.17 | % | 6.18 | % | 6.03 | % | 6.44 | % | 6.11 | % | 6.09 | % | 6.13 | % | ||||||||||
Investment Gains (Losses) | ||||||||||||||||||||||||||||
Realized Gains (Losses) on Investments | (7.9 | ) | (11.6 | ) | (14.5 | ) | 3.9 | (6.0 | ) | (0.2 | ) | (2.0 | ) | (6.2 | ) | (7.2 | ) | |||||||||||
Gains (Losses) on Derivatives | (2.5 | ) | (1.8 | ) | (3.4 | ) | 0.3 | 1.4 | (2.5 | ) | 0.9 | 0.1 | 2.7 | |||||||||||||||
Incr (Decr) in Unreal Gains on Sec | ||||||||||||||||||||||||||||
Avail-for-Sale (after DAC/Tax) | 244.9 | (626.0 | ) | 368.1 | 42.8 | (240.0 | ) | 268.4 | (282.2 | ) | (72.4 | ) | (276.4 | ) | ||||||||||||||
Incr (Decr) on Derivatives | 6.9 | (10.5 | ) | 1.3 | (5.8 | ) | (6.3 | ) | 4.2 | (3.0 | ) | (1.5 | ) | 27.8 | ||||||||||||||
Available-for-Sale and Trading Securities | ||||||||||||||||||||||||||||
[Billions of Dollars] | ||||||||||||||||||||||||||||
Fixed Maturity Sec (Fair Value) | 36.856 | 35.894 | 37.444 | 37.936 | 37.429 | 38.318 | 37.610 | 36.687 | 36.081 | |||||||||||||||||||
Fixed Maturity Sec (Amortized Cost) | 34.031 | 34.648 | 35.256 | 35.692 | 35.849 | 35.977 | 36.049 | 35.348 | 35.497 | |||||||||||||||||||
Equity Securities (Fair Value) | 0.200 | 0.185 | 0.180 | 0.163 | 0.157 | 0.157 | 0.154 | 0.147 | 0.178 | |||||||||||||||||||
Equity Securities (Amortized Cost) | 0.171 | 0.162 | 0.156 | 0.148 | 0.145 | 0.144 | 0.141 | 0.139 | 0.160 | |||||||||||||||||||
% of AFS Fixed Maturity Securities (Based on Fair Value) | ||||||||||||||||||||||||||||
Treasuries and AAA | 23.4 | % | 23.3 | % | 23.6 | % | 23.5 | % | 24.4 | % | 24.8 | % | 24.5 | % | 23.4 | % | 23.4 | % | ||||||||||
AA or better | 29.6 | % | 29.5 | % | 29.7 | % | 29.9 | % | 32.2 | % | 32.1 | % | 31.9 | % | 30.9 | % | 31.0 | % | ||||||||||
BB or less | 6.9 | % | 7.1 | % | 6.9 | % | 7.0 | % | 6.2 | % | 6.5 | % | 7.3 | % | 7.4 | % | 7.5 | % |
3/31/2006 | PAGE 40 | |||||||||||||||||||||||||||||||||||||||
Common Stock / Debt Information | ||||||||||||||||||||||||||||||||||||||||
Unaudited [Dollars per Share, except Percentages] | ||||||||||||||||||||||||||||||||||||||||
For the Year Ended December 31 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | |||||||||||||||||||||||||||||
Common Stock [1] | ||||||||||||||||||||||||||||||||||||||||
Highest Price | $ | 26.875 | $ | 28.500 | $ | 39.063 | $ | 49.438 | $ | 57.500 | $ | 56.375 | $ | 52.750 | $ | 53.650 | $ | 41.320 | $ | 50.380 | $ | 54.410 | ||||||||||||||||||
Lowest Price | 17.313 | 20.375 | 24.500 | 33.500 | 36.000 | 22.625 | 38.000 | 25.150 | 24.730 | 40.060 | 41.590 | |||||||||||||||||||||||||||||
Closing Price | 26.875 | 26.250 | 39.063 | 40.907 | 40.000 | 47.313 | 48.570 | 31.580 | 40.370 | 46.680 | 53.030 | |||||||||||||||||||||||||||||
Dividend Payout Ratio [2] | 39.7 | % | 38.2 | % | 22.8 | % | 43.9 | % | 50.5 | % | 38.3 | % | 44.9 | % | 273.5 | % | 49.1 | % | 37.0 | % | 32.2 | % | ||||||||||||||||||
Yield [3] | 3.4 | % | 3.7 | % | 2.7 | % | 2.7 | % | 2.9 | % | 2.6 | % | 2.6 | % | 4.2 | % | 3.5 | % | 3.1 | % | 2.8 | % | ||||||||||||||||||
Preferred Stock Dividend (Millions) | $ | 8.644 | $ | 0.112 | $ | 0.106 | $ | 0.100 | $ | 0.089 | $ | 0.078 | $ | 0.071 | $ | 0.061 | $ | 0.057 | $ | 0.052 | $ | 0.048 | ||||||||||||||||||
Debt: (End of Period) | ||||||||||||||||||||||||||||||||||||||||
Senior Debt Ratings | ||||||||||||||||||||||||||||||||||||||||
A.M. Best | a | a | a | a- | a- | a- | ||||||||||||||||||||||||||||||||||
Fitch | AA- | AA- | AA- | A+ | A+ | A+ | A+ | A | A | A | A | |||||||||||||||||||||||||||||
Moody's | A2 | A2 | A2 | A2 | A2 | A3 | A3 | A3 | A3 | A3 | A3 | |||||||||||||||||||||||||||||
Standard & Poors | A | A | A | A- | A- | A- | A- | A- | A- | A- | A- | |||||||||||||||||||||||||||||
Claims Paying Ratings: | ||||||||||||||||||||||||||||||||||||||||
Lincoln Life - A.M. Best | A+ | A+ | A+ | A | A | A | A | A+ | A+ | A+ | A+ | |||||||||||||||||||||||||||||
Lincoln Life - Fitch | AA+ | AA+ | AA+ | AA+ | AA+ | AA | AA | AA | AA | AA | AA | |||||||||||||||||||||||||||||
Lincoln Life - Moody's | Aa3 | Aa3 | Aa3 | Aa3 | Aa3 | Aa3 | Aa3 | Aa3 | Aa3 | Aa3 | Aa3 | |||||||||||||||||||||||||||||
Lincoln Life - Standard & Poors | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | |||||||||||||||||||||||||||||
First Penn - A.M. Best* | A+ | A+ | A+ | A | A | A | A | A+ | A+ | A+ | A+ | |||||||||||||||||||||||||||||
First Penn - Fitch | AA+ | AA+ | AA+ | AA | AA | AA | AA | AA | AA | |||||||||||||||||||||||||||||||
First Penn - Moody's | A1 | A1 | A1 | A1 | A1 | A1 | A1 | A1 | A1 | |||||||||||||||||||||||||||||||
First Penn - Standard & Poors* | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | |||||||||||||||||||||||||||||
LLA of New York - A.M. Best* | A+ | A+ | A | A | A | A | A+ | A+ | A+ | A+ | ||||||||||||||||||||||||||||||
LLA of New York - Fitch* | AA+ | AA+ | AA+ | AA | AA | AA | AA | AA | AA | |||||||||||||||||||||||||||||||
LLA of New York - Moody's | A1 | A1 | A1 | A1 | A1 | A1 | A1 | A1 | A1 | A1 | ||||||||||||||||||||||||||||||
LLA of New York - Standard & Poors* | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | ||||||||||||||||||||||||||||||
Ratios | ||||||||||||||||||||||||||||||||||||||||
Debt to Total Capitalization [4] | 22.8 | % | 18.8 | % | 17.0 | % | 21.2 | % | 23.2 | % | 20.8 | % | 21.3 | % | 23.4 | % | 20.7 | % | 20.9 | % | 17.6 | % | ||||||||||||||||||
Debt to Equity [4] | 29.5 | % | 23.1 | % | 20.5 | % | 26.9 | % | 30.3 | % | 26.3 | % | 27.0 | % | 30.5 | % | 26.1 | % | 26.5 | % | 21.3 | % | ||||||||||||||||||
Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | Jun | Sep | Dec | Mar | |||||||||||||||||||||||||||||
For the Quarter Ended | 2003 | 2003 | 2003 | 2004 | 2004 | 2004 | 2004 | 2005 | 2005 | 2005 | 2005 | 2006 | ||||||||||||||||||||||||||||
Common Stock: | ||||||||||||||||||||||||||||||||||||||||
Highest Price | $ | 37.500 | $ | 38.640 | $ | 41.320 | $ | 48.870 | $ | 50.380 | $ | 47.500 | $ | 48.700 | $ | 49.420 | $ | 47.770 | $ | 52.420 | $ | 54.410 | $ | 57.970 | ||||||||||||||||
Lowest Price | 27.870 | 34.630 | 35.410 | 40.060 | 43.260 | 41.900 | 40.790 | 44.360 | 41.590 | 46.590 | 46.940 | 52.000 | ||||||||||||||||||||||||||||
Closing Price | 35.630 | 35.380 | 40.370 | 47.320 | 47.250 | 47.000 | 46.680 | 45.140 | 46.920 | 52.020 | 53.030 | 54.590 | ||||||||||||||||||||||||||||
Yield [3] | 3.8 | % | 3.8 | % | 3.5 | % | 3.0 | % | 3.0 | % | 3.0 | % | 3.1 | % | 3.2 | % | 3.1 | % | 2.8 | % | 2.9 | % | 2.8 | % | ||||||||||||||||
Preferred Stock Dividend | $ | 0.014 | $ | 0.016 | $ | 0.014 | $ | 0.013 | $ | 0.013 | $ | 0.013 | $ | 0.013 | $ | 0.012 | $ | 0.012 | $ | 0.012 | $ | 0.012 | $ | 0.011 | ||||||||||||||||
(Millions) | ||||||||||||||||||||||||||||||||||||||||
Debt: (End of Period) | ||||||||||||||||||||||||||||||||||||||||
Senior Debt Ratings | ||||||||||||||||||||||||||||||||||||||||
A.M. Best | a | a | a- | a- | a- | a- | a- | a- | a- | a- | a- | a- | (5) | |||||||||||||||||||||||||||
Fitch | A | A | A | A | A | A | A | A | A | A | A | A | ||||||||||||||||||||||||||||
Moody's | A3 | A3 | A3 | A3 | A3 | A3 | A3 | A3 | A3 | A3 | A3 | A3 | ||||||||||||||||||||||||||||
Standard & Poors | A- | A- | A- | A- | A- | A- | A- | A- | A- | A- | A- | A- | (5) | |||||||||||||||||||||||||||
Claims Paying Ratings: | ||||||||||||||||||||||||||||||||||||||||
Lincoln Life - A.M. Best | A+ | A+ | A+ | A+ | A+ | A+ | A+ | A+ | A+ | A+ | A+ | A+ | ||||||||||||||||||||||||||||
Lincoln Life - Fitch | AA | AA | AA | AA | AA | AA | AA | AA | AA | AA | AA | AA | ||||||||||||||||||||||||||||
Lincoln Life - Moody's | Aa3 | Aa3 | Aa3 | Aa3 | Aa3 | Aa3 | Aa3 | Aa3 | Aa3 | Aa3 | Aa3 | Aa3 | ||||||||||||||||||||||||||||
Lincoln Life - Standard & Poors | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | (6) | |||||||||||||||||||||||||||
First Penn - A.M. Best* | A+ | A+ | A+ | A+ | A+ | A+ | A+ | A+ | A+ | A+ | A+ | A+ | ||||||||||||||||||||||||||||
First Penn - Fitch | AA | AA | AA | AA | AA | AA | AA | AA | AA | AA | AA | AA | ||||||||||||||||||||||||||||
First Penn - Moody's | A1 | A1 | A1 | A1 | A1 | A1 | A1 | A1 | A1 | A1 | A1 | A1 | ||||||||||||||||||||||||||||
First Penn - Standard & Poors* | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | ||||||||||||||||||||||||||||
LLA of New York - A.M. Best* | A+ | A+ | A+ | A+ | A+ | A+ | A+ | A+ | A+ | A+ | A+ | A+ | ||||||||||||||||||||||||||||
LLA of New York - Fitch* | AA | AA | AA | AA | AA | AA | AA | AA | AA | AA | AA | AA | ||||||||||||||||||||||||||||
LLA of New York - Moody's | A1 | A1 | A1 | A1 | A1 | A1 | A1 | A1 | A1 | A1 | A1 | A1 | (7) | |||||||||||||||||||||||||||
LLA of New York - Standard & Poors* | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | AA- | (7) | |||||||||||||||||||||||||||
Ratios | ||||||||||||||||||||||||||||||||||||||||
Debt to Total Capitalization [4] | 22.3 | % | 21.5 | % | 20.7 | % | 22.8 | % | 22.6 | % | 22.0 | % | 20.9 | % | 20.3 | % | 19.9 | % | 18.6 | % | 17.6 | % | 15.9 | % | ||||||||||||||||
Debt to Equity [4] | 28.7 | % | 27.5 | % | 26.1 | % | 29.5 | % | 29.1 | % | 28.1 | % | 26.5 | % | 25.5 | % | 24.8 | % | 22.9 | % | 21.3 | % | 18.9 | % | ||||||||||||||||
* Rating based on affiliation with Lincoln Life |
[1] Stock prices include the 2-for-1split in June 1999 | |||||||
[2] Indicated dividend divided by net income | |||||||
[3] Indicated dividend divided by the closing price | |||||||
[4] Equity used in calculation excludes accumulated other comprehensive income (loss). Junior subordinated debentures issued to affiliated trusts (hybrid securities) are considered 50% debt and 50% equity. | |||||||
(5) On April 3, 2006, the A.M. Best and Standard & Poor's Senior Debt ratings improved to "a" and "A+," respectively. | |||||||
(6) On April 3, 2006, the Lincoln Life Standard & Poor's rating improved to "AA." | |||||||
(7) On April 3, 2006, the LLA of New York Moody's and Standard & Poor's ratings improved to "Aa3" and "AA," respectively. |
3/31/2006 | PAGE 41 | ||||||
JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES | |||||||
FINANCIAL HIGHLIGHTS | |||||||
Unaudited Millions of Dollars | |||||||
For the Quarter Ended March 31 | |||||||
2006 | 2005 | ||||||
Amount | Amount | ||||||
NET INCOME BY SOURCES | |||||||
Individual Products | $ | 74.3 | $ | 84.3 | |||
Annuity and Investment Products | 24.7 | 21.7 | |||||
Benefit Partners | 29.5 | 33.8 | |||||
Communications | 11.2 | 11.0 | |||||
Corporate and Other | 3.2 | 6.9 | |||||
Total reportable segment results | 142.9 | 157.7 | |||||
Realized investment gains (losses), net of taxes | (4.6 | ) | 3.5 | ||||
Net income | $ | 138.3 | $ | 161.2 | |||
PERFORMANCE RATIOS (Annualized) | |||||||
Return on average equity (1) | 16.0 | % | 19.2 | % | |||
(1) Calculated as total reportable segment results divided by average equity (excluding accumulated other comprehensive income). | |||||||
Net income for the three months ended March 31, 2006 includes after-tax expenses of $5 million from the implementation of Statement of Financial Accounting Standards No. 123R "Share Based Payment" and a $7 million favorable tax adjustment. Jefferson Pilot previously used the intrinsic value method under Accounting Principles Board Opinion No. 25 "Accounting for Stock Issued to Employees" to account for stock options granted to employees and directors and recognized no expense. Refer to the Notes to Financial Statement to the Jefferson-Pilot Corporation March 31, 2006 Consolidated Financial Statements included in our Current Report on Form 8-K filed May 2, 2006. The favorable tax adjustment results from resolution with the Internal Revenue Service of the 2000 through 2003 Federal income tax examination. | |||||||
Net income for the three months ended March 31, 2005 includes a $19 million favorable after-tax adjustment from management actions to reduce bonuses on certain older in-force universal life insurance policies. Also included in first quarter 2005 net income are favorable after-tax adjustments of approximately $13 million that reflect Benefit Partners' active management and administrative streamlining of the acquired Canadian Life block, as well as quite favorable loss experience across all blocks. |
3/31/2006 | PAGE 42 | ||||||
JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES | |||||||
PERFORMANCE MEASURES | |||||||
Unaudited Millions of Dollars | |||||||
For the Quarter Ended March 31 | |||||||
2006 | 2005 | ||||||
Amount | Amount | ||||||
INDIVIDUAL PRODUCTS | |||||||
Annualized life insurance premium sales: | |||||||
Individual Markets excluding Community Banks and BOLI | $ | 52.1 | $ | 57.2 | |||
Community Banks and BOLI | 0.6 | 0.1 | |||||
$ | 52.7 | $ | 57.3 | ||||
Average UL policyholder fund balances | $ | 11,898.0 | $ | 11,410.3 | |||
Average VUL separate account assets | 1,866.9 | 1,663.3 | |||||
$ | 13,764.9 | $ | 13,073.6 | ||||
Average face amount of insurance in force: | |||||||
Total | $ | 169,188.0 | $ | 165,929.0 | |||
UL-Type Contracts | $ | 131,507.0 | $ | 128,397.0 | |||
Average assets | $ | 19,815.3 | $ | 18,870.5 | |||
ANNUITY AND INVESTMENT PRODUCTS | |||||||
Fixed annuity premium sales | $ | 220.2 | $ | 244.3 | |||
Variable annuity premium sales | 0.1 | 0.1 | |||||
Total | $ | 220.3 | $ | 244.4 | |||
Investment product sales | $ | 1,665.0 | $ | 1,297.0 | |||
Average fixed policyholder fund balances | $ | 9,385.4 | $ | 9,445.5 | |||
Average separate account policyholder fund balances | 268.5 | 311.9 | |||||
Average funding agreement balances | 300.0 | - | |||||
$ | 9,953.9 | $ | 9,757.4 | ||||
Effective investment spreads for fixed annuities and funding agreements | 2.03 | % | 2.13 | % | |||
Effective investment spreads for fixed annuities and funding agreements, excluding gross FAS 133 impact | 1.78 | % | 1.85 | % | |||
FAS 133 adjustment, net of DAC effect and income taxes | $ | 1.9 | $ | 2.5 | |||
Fixed annuity surrenders as a % of beginning fund balance | 19.1 | % | 12.4 | % | |||
Fixed annuity general and administrative expenses as a % of average invested assets | 0.23 | % | 0.17 | % | |||
Average assets | $ | 10,730.8 | $ | 10,523.5 | |||
BENEFIT PARTNERS | |||||||
Life, Disability and Dental annualized sales | $ | 64.0 | $ | 70.5 | |||
Premiums and other considerations: | |||||||
Life | $ | 117.2 | $ | 108.4 | |||
Disability | 134.0 | 117.1 | |||||
Dental | 32.8 | 32.0 | |||||
Other | 35.0 | 32.0 | |||||
Total | $ | 319.0 | $ | 289.5 | |||
Loss ratios: | |||||||
Life | 71.6 | % | 59.6 | % | |||
Disability | 63.0 | % | 60.2 | % | |||
Dental | 78.7 | % | 78.9 | % | |||
Combined | 68.4 | % | 62.3 | % | |||
Gross general and administrative expenses as a % of premium income | 10.1 | % | 9.3 | % | |||
Total expenses as a % of premium income | 24.4 | % | 25.3 | % |
3/31/2006 | PAGE 43 | ||||||
JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES | |||||||
CONSOLIDATED CONDENSED STATEMENTS OF INCOME | |||||||
Unaudited Millions of Dollars | |||||||
For the Quarter Ended March 31 | |||||||
2006 | 2005 | ||||||
Amount | Amount | ||||||
REVENUE | |||||||
Premiums and other considerations | $ | 364.4 | $ | 331.3 | |||
Universal life and investment product charges | 197.1 | 199.7 | |||||
Net investment income | 438.1 | 408.3 | |||||
Realized investment gains (losses) | (7.1 | ) | 5.5 | ||||
Communications sales | 61.4 | 60.5 | |||||
Broker-dealer concessions and other | 35.6 | 31.9 | |||||
Total revenue | 1,089.5 | 1,037.2 | |||||
BENEFITS AND EXPENSES | |||||||
Insurance and annuity benefits | 612.9 | 537.4 | |||||
Insurance commissions, net of deferrals | 69.6 | 65.6 | |||||
General and administrative expenses, net of deferrals | 54.1 | 38.6 | |||||
Insurance taxes, licenses and fees | 23.3 | 22.7 | |||||
Amortization of policy acquisition costs and | |||||||
value of business acquired | 79.2 | 77.9 | |||||
Interest expense | 16.6 | 13.8 | |||||
Communications operations | 38.8 | 37.8 | |||||
Total benefits and expenses | 894.5 | 793.8 | |||||
Income before income taxes | 195.0 | 243.4 | |||||
Income taxes | 56.7 | 82.2 | |||||
Net income | $ | 138.3 | �� | $ | 161.2 | ||
3/31/06 | PAGE 44 | |||||||||||||||||||||||||||
JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||||||
QUARTERLY CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||||||||||
Unaudited Millions of Dollars | ||||||||||||||||||||||||||||
For the Quarter Ended | ||||||||||||||||||||||||||||
Mar | Dec | Sep | Jun | Mar | Dec | Sep | Jun | Mar | ||||||||||||||||||||
2006 | 2005 | 2005 | 2005 | 2005 | 2004 | 2004 | 2004 | 2004 | ||||||||||||||||||||
REVENUE | ||||||||||||||||||||||||||||
Premiums and other considerations | $ | 364.4 | $ | 341.1 | $ | 330.8 | $ | 352.5 | $ | 331.3 | $ | 332.9 | $ | 327.6 | $ | 352.3 | $ | 279.8 | ||||||||||
UL & Investment product charges | 197.1 | 197.8 | 194.5 | 191.2 | 199.7 | 188.2 | 179.1 | 183.6 | 181.6 | |||||||||||||||||||
Net investment income | 438.1 | 428.9 | 428.8 | 424.5 | 408.3 | 445.3 | 406.6 | 413.2 | 406.5 | |||||||||||||||||||
Realized investment gains (losses) | (7.1 | ) | 8.6 | (7.4 | ) | 4.5 | 5.5 | 3.6 | 3.5 | 10.2 | 23.5 | |||||||||||||||||
Communications sales | 61.4 | 69.3 | 59.2 | 57.2 | 60.5 | 68.0 | 58.1 | 56.5 | 58.1 | |||||||||||||||||||
Broker-dealer concessions and other | 35.6 | 34.5 | 33.2 | 33.4 | 31.9 | 30.1 | 27.2 | 31.5 | 35.4 | |||||||||||||||||||
Total revenue | 1,089.5 | 1,080.2 | 1,039.1 | 1,063.2 | 1,037.2 | 1,068.1 | 1,002.1 | 1,047.2 | 984.8 | |||||||||||||||||||
BENEFITS AND EXPENSES | ||||||||||||||||||||||||||||
Insurance and annuity benefits | 612.9 | 597.8 | 580.9 | 601.4 | 537.4 | 586.1 | 574.3 | 585.3 | 541.0 | |||||||||||||||||||
Insurance commissions, net of deferrals | 69.6 | 65.3 | 64.9 | 67.1 | 65.6 | 61.3 | 62.0 | 67.4 | 59.7 | |||||||||||||||||||
General and administrative expenses, net of deferrals | 54.1 | 43.4 | 47.6 | 47.6 | 38.6 | 49.9 | 48.1 | 47.4 | 37.6 | |||||||||||||||||||
Insurance taxes, licenses and fees | 23.3 | 18.0 | 20.9 | 20.0 | 22.7 | 19.9 | 16.4 | 19.7 | 17.4 | |||||||||||||||||||
Amortization of policy acquisition costs and | ||||||||||||||||||||||||||||
value of business acquired | 79.2 | 79.8 | 82.1 | 78.2 | 77.9 | 89.3 | 56.5 | 74.9 | 66.8 | |||||||||||||||||||
Interest expense | 16.6 | 16.4 | 15.1 | 14.8 | 13.8 | 13.2 | 12.5 | 11.7 | 10.7 | |||||||||||||||||||
Communications operations | 38.8 | 36.2 | 32.2 | 29.4 | 37.8 | 36.2 | 30.8 | 29.3 | 36.7 | |||||||||||||||||||
Total benefits and expenses | 894.5 | 857.0 | 843.8 | 858.5 | 793.8 | 855.8 | 800.6 | 835.6 | 769.9 | |||||||||||||||||||
Income before taxes | 195.0 | 223.2 | 195.3 | 204.7 | 243.4 | 212.2 | 201.5 | 211.6 | 214.9 | |||||||||||||||||||
Income taxes | 56.7 | 73.5 | 64.5 | 67.9 | 82.2 | 66.6 | 67.7 | 69.5 | 73.7 | |||||||||||||||||||
Cumulative effect of change in accounting for long-duration contracts, | ||||||||||||||||||||||||||||
net of taxes | - | - | - | - | - | - | - | - | (16.6 | ) | ||||||||||||||||||
Net Income | $ | 138.3 | $ | 149.7 | $ | 130.9 | $ | 136.8 | $ | 161.2 | $ | 145.7 | $ | 133.8 | $ | 142.0 | $ | 124.6 | ||||||||||
QUARTERLY RETURN ON EQUITY | 16.0 | % | 16.9 | % | 16.2 | % | 16.1 | % | 19.2 | % | 17.9 | % | 16.9 | % | 17.4 | % | 16.2 | % |
3/31/2006 | PAGE 45 | ||||||
JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
Unaudited Millions of Dollars | |||||||
For the Quarter Ended March 31 | |||||||
2006 | 2005 | ||||||
Amount | Amount | ||||||
ASSETS | |||||||
Cash and investments | $ | 27,558.1 | $ | 28,140.6 | |||
Accrued investment income | 354.8 | 345.0 | |||||
Due from reinsurers | 1,295.8 | 1,317.9 | |||||
Deferred policy acquisition costs | 2,491.7 | 2,346.0 | |||||
Value of business acquired | 495.2 | 476.0 | |||||
Goodwill | 311.9 | 311.9 | |||||
Other assets | 671.9 | 673.3 | |||||
Assets held in separate accounts | 2,573.7 | 2,467.6 | |||||
Total assets | $ | 35,753.1 | $ | 36,078.3 | |||
LIABILITIES | |||||||
Policy liabilities | $ | 27,119.6 | $ | 27,092.2 | |||
Debt: | |||||||
Commercial paper borrowings | - | 260.3 | |||||
Obligations under repurchase agreements | 432.4 | 451.6 | |||||
Notes payable | 599.7 | 599.7 | |||||
Junior subordinated debentures | 309.3 | 309.3 | |||||
Income tax liabilities | 456.9 | 537.7 | |||||
Accounts payable, accruals and other liabilities | 393.9 | 443.0 | |||||
Liabilities related to separate accounts | 2,573.7 | 2,467.6 | |||||
Total liabilities | 31,885.5 | 32,161.4 | |||||
STOCKHOLDERS' EQUITY | |||||||
Common stock and paid in capital | 232.0 | 185.8 | |||||
Retained earnings | 3,431.5 | 3,293.3 | |||||
Accumulated other comprehensive income: | |||||||
Net unrealized gains: | |||||||
Bonds, net of DAC, VOBA and taxes | (57.5 | ) | 178.4 | ||||
Equities, net of taxes | 274.4 | 272.0 | |||||
Other | (12.8 | ) | (12.6 | ) | |||
Total accumulated other comprehensive income | 204.1 | 437.8 | |||||
Total stockholders' equity | 3,867.6 | 3,916.9 | |||||
Total liabilities and stockholders' equity | $ | 35,753.1 | $ | 36,078.3 | |||
3/31/06 | PAGE 46 | |||||||||||||||||||||||||||
JEFFERSON-PILOT CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||||||||||
Unaudited Millions of Dollars | ||||||||||||||||||||||||||||
For the Quarter Ended | ||||||||||||||||||||||||||||
Mar | Dec | Sep | Jun | Mar | Dec | Sep | Jun | Mar | ||||||||||||||||||||
2006 | 2005 | 2005 | 2005 | 2005 | 2004 | 2004 | 2004 | 2004 | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||
Cash and investments | $ | 27,558.1 | $ | 28,140.6 | $ | 28,073.9 | $ | 28,346.6 | $ | 27,599.3 | $ | 27,655.0 | $ | 27,393.0 | $ | 26,583.7 | $ | 27,156.2 | ||||||||||
Accrued investment income | 354.8 | 345.0 | 355.4 | 348.4 | 355.2 | 341.6 | 350.2 | 338.6 | 337.5 | |||||||||||||||||||
Due from reinsurers | 1,295.8 | 1,317.9 | 1,305.3 | 1,313.8 | 1,321.7 | 1,341.4 | 1,333.2 | 1,355.9 | 1,321.7 | |||||||||||||||||||
Deferred policy acquisition costs | 2,491.7 | 2,346.0 | 2,240.9 | 2,058.7 | 2,090.8 | 1,957.8 | 1,932.0 | 1,978.4 | 1,745.4 | |||||||||||||||||||
Value of business acquired | 495.2 | 476.0 | 463.0 | 440.6 | 485.9 | 472.2 | 454.1 | 507.4 | 449.4 | |||||||||||||||||||
Goodwill, net | 311.9 | 311.9 | 311.9 | 311.9 | 311.9 | 311.9 | 311.9 | 311.9 | 311.9 | |||||||||||||||||||
Other assets | 671.9 | 673.3 | 659.2 | 653.8 | 661.9 | 651.6 | 679.1 | 685.2 | 633.4 | |||||||||||||||||||
Separate account assets | 2,573.7 | 2,467.6 | 2,431.4 | 2,354.4 | 2,324.3 | 2,373.4 | 2,192.3 | 2,234.4 | 2,228.7 | |||||||||||||||||||
Total Assets | $ | 35,753.1 | $ | 36,078.3 | $ | 35,841.1 | $ | 35,828.2 | $ | 35,151.1 | $ | 35,104.8 | $ | 34,645.7 | $ | 33,995.6 | $ | 34,184.4 | ||||||||||
LIABILITIES | ||||||||||||||||||||||||||||
Policy liabilities | $ | 27,119.6 | $ | 27,092.2 | $ | 26,905.2 | $ | 26,807.4 | $ | 26,347.3 | $ | 26,165.9 | $ | 25,958.5 | $ | 25,711.9 | $ | 25,317.0 | ||||||||||
Debt: | ||||||||||||||||||||||||||||
Commercial paper borrowings | - | 260.3 | 224.0 | 197.6 | 154.3 | 187.7 | 174.1 | 187.3 | 154.0 | |||||||||||||||||||
Long-term notes payable | 599.7 | 599.7 | 599.7 | 599.7 | 599.7 | 599.6 | 599.6 | 599.6 | 599.6 | |||||||||||||||||||
Obligations under repurchase agreements | 432.4 | 451.6 | 499.5 | 401.0 | 537.5 | 468.3 | 494.5 | 509.4 | 454.0 | |||||||||||||||||||
Junior subordinated debentures | 309.3 | 309.3 | 309.3 | 309.3 | 309.3 | 309.3 | 309.3 | 309.3 | 309.3 | |||||||||||||||||||
Income tax liabilities | 456.9 | 537.7 | 531.7 | 151.6 | 594.2 | 619.9 | 629.5 | 476.6 | 615.1 | |||||||||||||||||||
Accrued expenses and other liabilities | 393.9 | 443.0 | 482.0 | 444.7 | 453.2 | 446.9 | 458.9 | 447.2 | 536.6 | |||||||||||||||||||
Separate account liabilities | 2,573.7 | 2,467.6 | 2,431.4 | 2,354.4 | 2,324.3 | 2,373.4 | 2,192.3 | 2,234.4 | 2,228.7 | |||||||||||||||||||
Total Liabilities | 31,885.5 | 32,161.4 | 31,982.9 | 31,265.6 | 31,319.8 | 31,170.9 | 30,816.7 | 30,475.8 | 30,214.2 | |||||||||||||||||||
STOCKHOLDERS' EQUITY | ||||||||||||||||||||||||||||
Common stock and paid in capital | 232.0 | 185.8 | 168.3 | 167.9 | 170.5 | 180.6 | 172.4 | 170.6 | 174.8 | |||||||||||||||||||
Retained earnings | 3,431.5 | 3,293.3 | 3,200.0 | 3,163.9 | 3,150.8 | 3,070.5 | 2,976.9 | 2,898.7 | 2,966.5 | |||||||||||||||||||
Accumulated other comprehensive income - | ||||||||||||||||||||||||||||
primarily net unrealized gains on securities | 204.1 | 437.8 | 489.9 | 728.7 | 510.0 | 682.8 | 679.7 | 450.5 | 828.9 | |||||||||||||||||||
Total Stockholders' Equity | 3,867.6 | 3,916.9 | 3,858.2 | 4,060.5 | 3,831.3 | 3,933.9 | 3,829.0 | 3,519.8 | 3,970.2 | |||||||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 35,753.1 | $ | 36,078.3 | $ | 35,841.1 | $ | 35,326.1 | $ | 35,151.1 | $ | 35,104.8 | $ | 34,645.7 | $ | 33,995.6 | $ | 34,184.4 | ||||||||||
COMPONENTS OF EQUITY | ||||||||||||||||||||||||||||
Common stock and paid in capital | $ | 232.0 | $ | 185.8 | $ | 168.3 | $ | 167.9 | $ | 170.5 | $ | 180.6 | $ | 172.4 | $ | 170.6 | $ | 174.8 | ||||||||||
Retained earnings | 3,431.5 | 3,293.3 | 3,200.0 | 3,163.9 | 3,150.8 | 3,070.5 | 2,976.9 | 2,898.7 | 2,966.5 | |||||||||||||||||||
Accumulated other comprehensive income | ||||||||||||||||||||||||||||
Net unrealized gains | ||||||||||||||||||||||||||||
Bonds, net of DAC, VOBA and taxes | (57.5 | ) | 178.4 | 246.3 | 458.8 | 260.0 | 402.5 | 411.7 | 185.1 | 545.3 | ||||||||||||||||||
Equities, net of taxes | 274.4 | 272.0 | 254.6 | 281.6 | 260.8 | 289.9 | 268.0 | 265.3 | 283.6 | |||||||||||||||||||
Other | (12.8 | ) | (12.6 | ) | (11.0 | ) | (11.7 | ) | (10.8 | ) | (9.7 | ) | - | - | - | |||||||||||||
Total accumulated other comprehensive income | 204.1 | 437.8 | 489.9 | 728.7 | 510.0 | 682.8 | 679.7 | 450.5 | 828.9 | |||||||||||||||||||
Stockholders' equity | $ | 3,867.6 | $ | 3,916.9 | $ | 3,858.2 | $ | 4,060.5 | $ | 3,831.3 | $ | 3,933.9 | $ | 3,829.0 | $ | 3,519.8 | $ | 3,970.2 |