Lincoln National (LNC) 8-K Revised for New Segmentation

Lincoln Financial Group

Financial Reporting Investor Call

July 11, 2006

Fred Crawford

Chief Financial Officer

Doug Miller
Chief Accounting Officer

1

Drivers of New Segmentation

Merger with Jefferson Pilot

Creation of Employer Markets segment

A “pure” asset manager presentation of

Delaware Investments

Consolidation of distribution expenses in

manufacturing segments

2

Annuity and Investment Products

Fixed and Equity-Indexed Annuities

Funding Agreements

Individual Products

UL/VUL, Traditional and

Term Life Insurance

Community Banks and BOLI

Benefit Partners

Group Term Life, Disability and

Dental Insurance

Communications

Radio, Television and

Sports Production

Corporate and Other

Excess Capital and

Corporate Investments

Jefferson Pilot Financial

Lincoln Financial Group

Retirement

Fixed and Variable Annuities

Alliance Mutual Funds

Institutional Pensions

Life Insurance

UL/VUL and ISWL

(including Single Life and
Survivorship) and Term

COLI/BOLI

Delaware Investments

Managed Accounts, Mutual Funds,

Institutional, 529 Plans and
General Account

Director/401(k)

Lincoln UK

Unit-Linked Life Insurance

and Pensions

Corporate and Other

Lincoln Financial Distributors

Lincoln Financial Advisors

Segments Before Merger

3

Individual

Markets

Investment

Management

Lincoln Financial

Media

Lincoln UK

Other

Operations

LFG

Consolidated

Employer

Markets

Annuities

Life

Retirement

Products

Executive

Benefits

Benefit

Partners

New Reporting Structure

4

Group LTD,

Group STD,

Group Life,

Dental

Benefit

Partners

Lincoln Financial Group

Delaware

Investments

Jefferson

Pilot

LFD

LFA

Director^®

Executive

 Benefits

(COLI)

Lincoln

Alliance^®

Program 

Multi-Fund^®

Group

Variable
Annuity

Life and

Annuity

Before: Employer Markets Segment

Employer-sponsored businesses were spread across the enterprise

5

After:Employer MarketsAlignment of Product, Distribution and MarketsProductsDirector^®Lincoln Alliance^® ProgramGroup Variable AnnuityMulti-Fund^®Executive Benefits (COLI)LTD/STDGroup LifeDentalDistributionBrokersFinancialPlannersIndependentAgentsTPAsConsultantsMarketsCorporateprivately-held business healthcare education

Internal Sales Professionals/ Relationship Managers

6

Investment

Management

Individual

Markets

Employer

Markets

Lincoln UK

Managed

Accounts,

Mutual Funds,

Institutional,

529 Plans and

General Account
Management

Life: UL/VUL

and ISWL
(Single Life and
Survivorship)
and Term

Annuities:

Variable, Fixed
and
Equity-Indexed
Annuities

Unit-Linked Life

Insurance and
Pensions

Retirement

Products: Director^®, Lincoln Alliance^® Program, Multi-Fund^®  and Group Variable
Annuity

Executive Benefits

and Other:

COLI, BOLI and

Pensions

Benefit Partners:

Group Life, Disability
and Dental

Radio, Television

and Sports
Production

Lincoln

Financial Media

Corporate and Shared Services

New Segment Business Mix

7

“Other Operations”

Reporting Changes

Includes:

Deferred gain amortization

Financing costs

Branding expenses

Earnings on excess capital

Earnings on corporate assets

Excludes:

Distribution expenses (P&L)

8

Statistical Supplement Changes

 Jefferson Pilot historical results

 5 period reporting format

 Combined production results

 Expense detail

 New businesses

9

Former JP

Annuity and Investment Products

Individual Products

Benefit Partners

Communications

Corporate and Other

3

1

Individual Markets

Life Insurance

UL/VUL and ISWL (Single Life and Survivorship) and Term 

Annuities

Variable, Fixed and Equity-Indexed Annuities

Employer Markets

Retirement Products

Director^®, Lincoln Alliance^® Program, Multi-Fund^® 

and Group Variable Annuities

Benefit Partners

Group Life, Disability and Dental

Executive Benefits and Other

COLI, BOLI and Pensions

Investment Management

Managed Accounts, Mutual Funds, Institutional,

529 Plans and General Account Management

Lincoln UK

Unit-Linked Life Insurance and Pensions

Lincoln Financial Media

Radio, Television and Sports Production

Other Operations

2

Segment Reporting Changes

Former Lincoln

Retirement

Life Insurance

Delaware Investments

Lincoln UK

Corporate and Other

(LFA and LFD)

10

1Q06 Reported

(millions of dollars)

1Q06 Revised

(millions of dollars)

Retirement

Life

Investment Management

Lincoln UK

Corporate

Total Income from

Operations

Individual Markets

   Annuities

   Life Insurance

Employer Markets

   Retirement Products

   Executive Benefits & Other

Investment Management

Lincoln UK

Other Operations

Total Income from Operations

* Includes restructuring charges of $0.2 million

$123

82

20

11

(15

$221

)

$66

69

52

8

15

11

0

$221

*

1Q06 Revised Income From Operations

(Lincoln Financial Only)

11

12

What Changed?

Includes restructuring and merger related expenses

Definition of Income From Operations

Income (loss) from operations represents after tax results

excluding, as applicable, realized gains or losses on
investments and derivatives, cumulative effect of
accounting changes, reserve changes on business sold
through reinsurance, gain on sale of subsidiaries and
book of business and loss on early retirement of debt.

13

*

Purchase price allocated of approximately $1.1 billion, net of deferred taxes, is related to Lincoln Financial Media. Includes approximately $700 million of goodwill and $650 million of intangibles.

Overall Earnings Impact Neutral to

Modestly Positive in 2006

Purchase Accounting

Deferred acquisition cost (DAC) to Value of

business acquired (VOBA)

Mark-to-market asset portfolio and corporate

debt

Goodwill and intangibles

Approximately $3.3 billion in goodwill*

14

Lincoln will not provide EPS Guidance

Approach to Guidance and Outlook

Outlook:

Market conditions and impact on production

Merger expense saves and integration costs

Capital management

Select earnings drivers

Annual earnings range on select businesses

Long-range ROE targets

15

Lincoln Financial Group

Financial Reporting Investor Call

Questions and Answers

16

Forward Looking Statements

Cautionary Language

This document and oral statements made during the presentation may contain information that includes or is based

upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements give expectations or forecasts of future events. You can identify these statements by the
fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,”
“expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with a
discussion of future operating or financial performance. In particular, these include statements relating to future
actions, prospective services or products, future performance or results of current and anticipated services or
products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, trends in operations and
financial results.

Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by

known or unknown risks and uncertainties. Many such factors will be important in determining our actual future results.
These statements are based on current expectations and the current economic environment. They involve a number of
risks and uncertainties that are difficult to predict. These statements are not guarantees of future performance. Actual
results could differ materially from those expressed or implied in the forward-looking statements. Among factors that
could cause actual results to differ materially are:

l

Problems arising with the ability to successfully integrate our and Jefferson-Pilot Corporation’s (“Jefferson-Pilot”)

businesses, which may affect our ability to operate as effectively and efficiently as expected or to achieve the
expected synergies from the merger or to achieve such synergies within our expected timeframe and the impact of the
application of purchase accounting on results of operations;

l

Legislative, regulatory or tax changes, both domestic and foreign, that affect the cost of, or demand for, our products,

the required amount of reserves and/or surplus, or otherwise affect our ability to conduct business, including changes
to statutory reserves and/or risk-based capital requirements related to secondary guarantees under universal life and
variable annuity products such as Actuarial Guideline 38; restrictions on revenue sharing and 12b-1 payments; and the
potential for U.S. Federal tax reform;

l

The initiation of legal or regulatory proceedings against LNC or its subsidiaries and the outcome of any legal or

regulatory proceedings, such as: (a) adverse actions related to present or past business practices common in
businesses in which LNC and its subsidiaries compete; (b) adverse decisions in significant actions including, but not
limited to, actions brought by federal and state authorities, and extra-contractual and class action damage cases; (c)
new decisions that result in changes in law; and (d) unexpected trial court rulings;

l

Changes in interest rates causing a reduction of investment income, the margins of our fixed annuity and life

insurance businesses and demand for our products;

l

A decline in the equity markets causing a reduction in the sales of our products, a reduction of asset fees that LNC

charges on various investment and insurance products, an acceleration of amortization of deferred acquisition costs,

the value of business acquired, deferred sales inducements and deferred front-end loads
and an increase in liabilities related to guaranteed benefit features of our variable annuity products;

l

Ineffectiveness of our various hedging strategies used to offset the impact of declines in the equity markets;

l

A deviation in actual experience regarding future persistency, mortality, morbidity, interest rates or equity market

returns from our assumptions used in pricing our products, in establishing related insurance reserves, and in the
amortization of intangibles that may result in an increase in reserves and a decrease in net income;

17

Forward Looking Statements

Cautionary Language

l

Changes in accounting principles generally accepted in the U.S. that may result in unanticipated changes to

our net income;

l

Lowering of one or more of our debt ratings issued by nationally recognized statistical rating organizations, and the

adverse impact such action may have on our ability to raise capital and on our liquidity and financial condition;

l

Lowering of one or more of the insurer financial strength ratings of our insurance subsidiaries, and the adverse impact

such action may have on the premium writings, policy retention, and profitability of our insurance subsidiaries;

l

Significant credit, accounting, fraud or corporate governance issues that may adversely affect the value of certain

investments in the portfolios of our companies requiring that LNC realize losses on such investments;

l

The impact of acquisitions and divestitures, restructurings, product withdrawals and other unusual items, including our

ability to integrate acquisitions and to obtain the anticipated results and synergies from acquisitions;

l

The adequacy and collectibility of reinsurance that we have purchased;

l

Acts of terrorism or war that may adversely affect our businesses and the cost and availability of reinsurance;

l

Competitive conditions, including pricing pressures, new product offerings and the emergence of new competitors, that

may affect the level of premiums and fees that we can charge for our products;

l

The unknown impact on our business resulting from changes in the demographics of our client base, as aging

baby-boomers move from the asset-accumulation stage to the asset-distribution stage of life;

l

Loss of key management, portfolio managers in the Investment Management segment, financial planners or

wholesalers; and

l

Changes in general economic or business conditions, both domestic and foreign, that may be less favorable than

expected and may affect foreign exchange rates, premium levels, claims experience, the level of pension benefit costs
and funding, and investment results.

The risks included here are not exhaustive. We describe additional risks in our recent Forms 10-K, 10-Q and 8-K and

other documents filed with the Securities and Exchange Commission. Moreover, we operate in a rapidly
changing and competitive environment. New risk factors emerge from time to time and it is not possible for
management to predict all such risk factors.

Further, it is not possible to assess the impact of all risk factors on our business or the extent to which any factor, or

combination of factors, may cause actual results to differ materially from those contained in any forward-looking
statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking
statements as a prediction of actual results. In addition, we disclaim any current intention to update any
forward-looking statements to reflect events or circumstances that occur after the date of this document.

18