Lincoln National (LNC) 8-K Lincoln Financial Group Reports Third Quarter 2006 Earnings

 

Lincoln Financial Group

Statistical Report

Third Quarter

2006

Table of Contents
LFG Analyst Coverage
Notes
Financial Highlights	1 - 4
Consolidated Expense Detail	5
Operating Results Summary	6
Consolidated Statements of Income	7
Consolidating Statements of Income from Operations	8-11
Consolidated Balance Sheet	12
Balance Sheet Data - Segment Highlights	13
Individual Markets
Individual Life Insurance
Income Statements & Operational Data	14
Operational Data	15
Account Value Roll Forward	16
Individual Annuities
Income Statements & Operational Data	17
Account Value Roll Forward	18
Account Values	19
Employer Markets
Defined Contribution
Income Statements & Operational Data	20
Account Value Roll Forward	21
Supplemental Data	22
Executive Benefits
Income Statements & Operational Data	23
Account Value Roll Forward and Supplemental Data	24
Group Protection
Income Statements & Operational Data	25
Supplemental Data	26
Investment Management
Income Statements	27
Assets Under Management Roll Forward	28
Lincoln UK
Income Statements	29
Operational Data	30
Lincoln Financial Media	31
Other Operations	31
Domestic Deposits / Account Balances / Net Flows	32
Investment Data
Assets Managed	33
Other Investment Data	34

9/30/2006 ii

NOTES

On April 3, 2006, LNC completed its previously announced merger with Jefferson Pilot Corporation ("JP"). Beginning with the second quarter of 2006, we are reporting results through the following segments: Individual Markets - Annuities, Individual Markets - Life Insurance, Employer Markets - Retirement Products & Other, Employer Markets - Group Protection, Investment Management, Lincoln UK and Lincoln Financial Media. Historical information presented in this report has been restated to reflect the new organizational structure. As described below, certain reclassifications have been made to historically reported items to reflect the new reporting practices of LNC.

Definitions and Presentation

"Income from Operations," "Operating Revenue," "Return on Capital," and "Station Operating Income" are non-GAAP financial measures and do not replace GAAP revenue and net income (loss). 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,

* 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, and

* Loss on early retirement of debt, including subordinated debt

NOTE: Income from operations is lower than previously reported as it now includes restructuring charges previously excluded in the determination of income from operations

* 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, and

* 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, capital securities and junior subordinated debentures issued to affiliated trusts. Return on capital is calculated by dividing annualized 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.

* Station operating income is calculated as communications revenues less operating costs and expenses before depreciation and amortization.

Income from operations, operating revenue, return on capital, and station operating income 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, spreads, and assets under management.

* Sales as reported consist of the following:

* Universal life ("UL"), including Moneyguard, and COLI - first year commissionable premium plus 5% of excess premium received, including UL internal replacements

* Whole life and term - first year paid premium

* Annuity - deposits from new and existing customers

* Group Protection - annualized first year premium from new policies

* Investment Management Retail Sales and Institutional Inflows - contributions, transfer in kind purchases, and reinvested dividends for new and existing accounts.

Reclassifications

Certain reclassifications have been made in the historical presentation of certain revenue and expense items. The principal reclassifications consist of the following:

* Deferred Front End Loads ("DFEL") - capitalization and amortization of DFEL is reported as a component of expense assessments revenue. Depending on the segment, these had previously been reported as a component of either other revenue, benefits expense or DAC amortization.

* Investment Management Advisory Fees and General and Administrative Expenses - certain reclassifications have been made between revenue and expenses for such items as distribution fees and management fee waivers to conform to current industry practices.

9/30/2006 PAGE 1

Financial Highlights

Unaudited [Millions of Dollars, except Common Share Data]

	For the Quarter Ended September 30												For the Nine Months Ended September 30
	2006			2005									2006			2005
	Amount			Amount			Change			% Change			Amount			Amount			Change			% Change
Income from Operations - By Segment
Individual Life Insurance	$	122.8		$	64.9		$	57.9			89.2	%	$	339.0		$	185.7		$	153.3			82.6	%
Individual Annuities		129.4			79.0			50.4			63.8	%		284.8			181.1			103.7			57.3	%
Individual Markets		252.2			144.0			108.2			75.1	%		623.8			366.8			257.0			70.1	%
Defined Contribution		52.5			53.4			(0.9	)		-1.7	%		159.3			141.9			17.4			12.3	%
Executive Benefits		12.8			2.5			10.3			NM			36.5			10.1			26.4			261.4	%
Group Protection		28.8			-			28.8			NM			65.8			-			65.8			NM
Employer Markets		94.0			55.9			38.1			68.2	%		261.6			152.0			109.6			72.1	%
Investment Management		13.4			4.8			8.6			179.2	%		40.8			7.9			32.9			NM
Lincoln UK		8.3			9.6			(1.3	)		-13.5	%		28.9			29.7			(0.8	)		-2.7	%
Lincoln Financial Media		14.6			-			14.6			NM			26.5			-			26.5			NM
Other Operations		(11.5	)		12.2			(23.7	)		NM			(37.4	)		44.7			(82.1	)		NM
Total Income from Operations (1)		371.1			226.3			144.8			64.0	%		944.1			601.2			342.9			57.0	%
Realized losses		(5.0	)		(1.1	)		(3.9	)		NM			(13.2	)		(8.5	)		(4.7	)		-55.3	%
Net gain (loss) on reinsurance
derivative/trading account securities		(2.2	)		3.5			(5.7	)		NM			2.8			3.0			(0.2	)		-6.7	%
Gain on sale of subsidiaries/ businesses		-			-			-			NM			-			9.3			(9.3	)		-100.0	%
Reserve development/ amortization of related deferred gain		0.2			0.2			-			-			0.6			0.6			-			-
Net Income	$	364.1		$	228.8		$	135.3			59.1	%	$	934.3		$	605.6		$	328.7			54.3	%
Earnings per share (diluted)
Income from Operations (1)	$	1.31		$	1.29		$	0.02			1.6	%	$	3.80		$	3.42		$	0.38			11.1	%
Realized losses		(0.02	)		(0.01	)		(0.01	)		-100.0	%		(0.05	)		(0.05	)		-			-
Net gain (loss) on reinsurance
derivative/trading account securities		(0.01	)		0.02			(0.03	)		NM			0.01			0.02			(0.01	)		-50.0	%
Gain on sale of subsidiaries/ businesses		-			-			-			NM			-			0.05			(0.05	)		-100.0	%
Reserve development/ amortization of related deferred gain		-			-			-			NM			-			-			-			NM
Net Income	$	1.29		$	1.30		$	(0.01	)		-0.8	%	$	3.76		$	3.44		$	0.32			9.3	%
Operating Revenue- By Segment
Individual Life Insurance	$	895.3		$	458.5		$	436.8			95.3	%	$	2,297.4		$	1,409.4		$	888.0			63.0	%
Individual Annuities		596.5			362.4			234.1			64.6	%		1,523.9			1,050.4			473.5			45.1	%
Individual Markets		1,491.8			820.9			670.9			81.7	%		3,821.2			2,459.8			1,361.4			55.3	%
Defined Contribution		245.1			238.7			6.4			2.7	%		743.2			706.3			36.9			5.2	%
Executive Benefits		104.3			59.4			44.9			75.6	%		262.7			165.8			96.9			58.4	%
Group Protection		332.1			-			332.1			NM			687.0			-			687.0			NM
Employer Markets		681.5			298.1			383.4			128.6	%		1,692.9			872.1			820.8			94.1	%
Investment Management		140.4			123.2			17.2			14.0	%		414.6			347.4			67.2			19.3	%
Lincoln UK		72.3			102.9			(30.6	)		-29.7	%		223.2			255.8			(32.6	)		-12.7	%
Lincoln Financial Media		60.0			-			60.0			NM			117.7			-			117.7			NM
Other Operations		51.4			45.9			5.5			12.0	%		150.7			146.3			4.4			3.0	%
Total Operating Revenue		2,497.4			1,391.0			1,106.4			79.5	%		6,420.3			4,081.5			2,338.8			57.3	%
Realized losses		(6.7	)		(1.6	)		(5.1	)		NM			(20.3	)		(12.8	)		(7.5	)		-58.6	%
Gain (loss) on reinsurance
derivative/trading account securities		(3.8	)		5.3			(9.1	)		NM			3.9			4.6			(0.7	)		-15.2	%
Gain on sale of subsidiaries/ businesses		-			-			-			NM			-			14.2			(14.2	)		-100.0	%
Amortization of deferred gain-reserve development		0.3			0.3			-			-			1.0			0.9			0.1			11.1	%
Total Revenue	$	2,487.2		$	1,395.0		$	1,092.2			78.3	%	$	6,404.6		$	4,088.4		$	2,316.2			56.7	%

⁽¹⁾ Income from operations includes after-tax restructuring charges of $0.6 million, or 0 cents per share, and $1.8 million, or 1 cent per share, for the quarters ended September 30, 2006 and 2005, respectively, and $7.1 million, or 3 cents per share, and $18.1 million, or 10 cents per share, for the nine months ended September 30, 2006 and 2005, respectively.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 2

Financial Highlights

Unaudited [in Billions]

Operational Data by Segment	For the Quarter Ended September 30											For the Nine Months Ended September 30
	2006			2005								2006			2005
	Amount			Amount		Change			% Change			Amount			Amount		Change			% Change
Individual Markets
Individual Annuities
Gross deposits	$	2.720		$	1.904	$	0.816			42.9	%	$	7.596		$	5.527	$	2.069			37.4	%
Net flows		0.304			0.717		(0.413	)		-57.6	%		1.773			2.109		(0.336	)		-15.9	%
Account values (gross)		62.916			46.651		16.266			34.9	%		62.916			46.651		16.266			34.9	%
Account values (net of reinsurance)		60.872			44.393		16.478			37.1	%		60.872			44.393		16.478			37.1	%
Individual Life Insurance
Sales (in millions) (1)		152.5			72.9		79.6			109.2	%		352.8			212.6		140.2			65.9	%
Life insurance in-force		495.699			311.310		184.388			59.2	%		495.699			311.310		184.388			59.2	%
Account values		25.821			13.745		12.076			87.9	%		25.821			13.745		12.076			87.9	%
Employer Markets
Defined Contribution
Gross deposits (2)	$	1.086		$	1.012	$	0.074			7.3	%	$	3.486		$	3.324	$	0.161			4.8	%
Net flows		0.037			0.028		0.009			32.1	%		0.331			0.445		(0.114	)		-25.6	%
Account values - annuities		27.591			25.979		1.612			6.2	%		27.591			25.979		1.612			6.2	%
Alliance Mutual Funds		4.636			3.672		0.964			26.3	%		4.636			3.672		0.964			26.3	%
Account values including Alliance Mutual Funds		32.227			29.651		2.576			8.7	%		32.227			29.651		2.576			8.7	%
Executive Benefits
COLI/BOLI sales (in millions)		16.3			16.1		0.2			1.2	%		50.4			38.8		11.6			29.9	%
Life insurance in-force		15.342			7.506		7.836			104.4	%		15.342			7.506		7.836			104.4	%
Account values		4.252			1.256		2.996			238.5	%		4.252			1.256		2.996			238.5	%
Group Protection
Annualized sales (in millions)		50.2			-		50.2			NM			95.6			-		95.6			NM
Loss ratio (3)		68.4	%		-		NM			NM			66.6	%		-		NM			NM
Investment Management Segment
Retail deposits	$	2.497		$	3.572	$	(1.075	)		-30.1	%	$	9.799		$	11.472	$	(1.673	)		-14.6	%
Retail net flows		(0.300	)		1.720		(2.021	)		NM			1.327			5.294		(3.967	)		-74.9	%
Institutional in-flows		2.406			3.166		(0.760	)		-24.0	%		10.214			11.469		(1.255	)		-10.9	%
Institutional net flows		1.046			1.825		(0.780	)		-42.7	%		5.324			7.045		(1.721	)		-24.4	%
Total Deposits and In-flows		4.904			6.738		(1.835	)		-27.2	%		20.013			22.941		(2.928	)		-12.8	%
Total Net Flows		0.745			3.546		(2.800	)		-79.0	%		6.651			12.339		(5.688	)		-46.1	%
Assets Under Management- Retail and Institutional		89.511			73.274		16.237			22.2	%		89.511			73.274		16.237			22.2	%
Assets Under Management - General Account		67.410			43.095		24.314			56.4	%		67.410			43.095		24.314			56.4	%
Assets Under Management - Total Segment		156.921			116.369		40.552			34.8	%		156.921			116.369		40.552			34.8	%
Consolidated
Domestic Retail Deposits	$	6.297		$	6.417	$	(0.120	)		-1.9	%	$	21.255		$	20.098	$	1.157			5.8	%
Domestic Retail Account Balances		156.998			117.175		39.823			34.0	%		156.998			117.175		39.823			34.0	%
Domestic Retail Net Flows		0.532			2.749		(2.217	)		-80.6	%		4.876			8.790		(3.914	)		-44.5	%
Domestic Deposits		8.501			9.366		(0.865	)		-9.2	%		30.645			30.802		(0.158	)		-0.5	%
Domestic Net Flows		1.717			4.524		(2.807	)		-62.0	%		10.254			15.760		(5.506	)		-34.9	%
Assets Under Management		220.300			164.944		55.356			33.6	%		220.300			164.944		55.356			33.6	%

⁽¹⁾ Sales for Individual Life Insurance consist of first year commissionable premium for Universal life ("UL"), including Moneyguard, and COLI plus 5% of excess premium received, including UL internal replacements, and first year paid premiums for Whole life and Term products

⁽²⁾ Includes deposits for Alliance Mutual Funds which are not included in separate account liabilities on our balance sheet.

⁽³⁾ Represents combined loss ratio for Life, Disability and Dental business.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 3

Financial Highlights

Unaudited [Millions of Dollars, except Common Share Data]

	For the Quarter Ended September 30											For the Nine Months Ended September 30
	2006 Amount			2005 Amount			Change		% Change			2006 Amount			2005 Amount			Change		% Change
Balance Sheet Assets - End of Period	$	171,726.6		$	122,170.2		$	49,556.4		40.6	%	$	171,726.6		$	122,170.2		$	49,556.4		40.6	%
Shareholders' Equity
Beg of period (including AOCI)	$	11,404.8		$	6,363.5		$	5,041.3				$	6,384.4		$	6,175.6		$	208.8
End of period (including AOCI)		12,043.2			6,284.4			5,758.7					12,043.2			6,284.4			5,758.7
End of period (excluding AOCI)		11,436.0			5,663.6			5,772.4					11,436.0			5,663.6			5,772.4
Average equity (excluding AOCI)		11,437.9			5,555.9			5,882.0					9,568.0			5,422.8			4,145.2
Return on Equity
Net income/average equity (excluding AOCI)		12.7	%		16.5	%							13.0	%		14.9	%
Inc from operations/average equity (excluding AOCI)		13.0	%		16.3	%							13.2	%		14.8	%
Return on Capital
Inc from operations/average capital		10.5	%		13.6	%							10.8	%		12.3	%
Common Stock Outstanding
Average for the period - diluted		282.4			175.8			106.6		60.6	%		248.0			176.0			72.0		40.9	%
End of period - assuming conv of preferreds		277.6			173.5			104.1		60.0	%		277.6			173.5			104.1		60.0	%
End of period - diluted		281.3			176.3			105.1		59.6	%		281.3			176.3			105.1		59.6	%
Book value (including AOCI)	$	43.39		$	36.23		$	7.16		19.8	%	$	43.39		$	36.23		$	7.16		19.8	%
Book value (excluding AOCI)	$	41.20		$	32.65		$	8.55		26.2	%	$	41.20		$	32.65		$	8.55		26.2	%
Cash Returned to Shareholders
Share repurchase - dollar amount	$	350.3		$	-		$	350.3				$	855.6		$	103.6		$	752.0
Dividends declared to shareholders		104.8			63.8			41.0					319.7			191.1			128.6
Total Cash Returned to Shareholders	$	455.0		$	63.8		$	391.3				$	1,175.3		$	294.7		$	880.6
Share repurchase - number of shares		6.314			-			6.314					14.374			2.331			12.043
Dividend declared on common stock - per share	$	0.380		$	0.365		$	0.015		4.1	%	$	1.140		$	1.095		$	0.045		4.1	%
Dividend payout ratio (1)		29.5	%		28.1	%							30.3	%		31.8	%
Annualized yield (2)		2.4	%		2.8	%							1.8	%		2.1	%
Comprehensive Income (Loss)
Net income	$	364.1		$	228.8							$	934.3		$	605.6
Net unrealized gains (losses) on securities		629.5			(282.2	)							(18.5	)		(253.8	)
Gains (losses) on derivatives		4.3			(3.0	)							48.5			(5.1	)
Foreign currency translation		8.0			(9.8	)							53.1			(54.8	)
Minimum pension liability adjustment		0.4			0.7								(3.7	)		3.9
Comprehensive Income	$	1,006.3		$	(65.5	)						$	1,013.6		$	295.8
Ratios:
Debt to total capitalization (3)		22.2	%		20.9	%							22.2	%		20.9	%
Debt to equity (3)		28.5	%		26.5	%							28.5	%		26.5	%
Ratings as of October 30, 2006:
		A.M. Best			Fitch			Moody's		Standard & Poors
Senior Debt Ratings:		a			A			A3		A+
Financial Strength Ratings:
Lincoln National Life Insurance Company		A+			AA			Aa3		AA
First Penn-Pacific Life Insurance Company		A+			AA			A1		AA-
Lincoln Life & Annuity Company of New York		A+			AA			Aa3		AA
Jefferson-Pilot Life Insurance Company		A+			AA			Aa3		AA
Jefferson Pilot Financial Insurance Company		A+			AA			Aa3		AA
Jefferson Pilot LifeAmerica Insurance Company		A+			AA			N/R		AA

^[1] Indicated dividend divided by net income

^[2] Indicated dividend divided by the closing price

^[3] Equity used in calculation excludes accumulated other comprehensive income (loss). Capital securities are considered 25% debt and 75% equity. The calculation for the second quarter of 2006 includes adjustments to beginning equity for stock issued in connection with the April 3, 2006 merger with Jefferson-Pilot Corporation ("JP") and the accelerated stock repurchase transaction.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 4

Combined Production Data ⁽¹⁾

Unaudited [in Billions]

	Three Months Ended													Nine Months Ended
	Sept.		Dec.		March		June		Sept.		%			Sept.		Sept.		%
	2005		2005		2006		2006		2006		Change			2005		2006		Change
Individual Markets
Individual Life Insurance
Sales by Product (millions)
Universal Life
Excluding MoneyGuard	$	118.8	$	117.2	$	83.4	$	97.5	$	119.9		0.9	%	$	305.7	$	300.7		-1.6	%
MoneyGuard		9.1		9.4		7.7		7.5		8.3		-8.8	%		24.5		23.5		-4.1	%
Total		127.9		126.5		91.1		105.0		128.2		0.2	%		330.2		324.2		-1.8	%
Variable universal life		14.5		20.6		16.4		15.7		13.0		-10.3	%		49.8		45.1		-9.4	%
Whole life		0.8		0.9		1.2		0.4		0.7		-12.5	%		2.9		2.3		-20.7	%
Term		10.0		10.7		11.2		11.3		10.7		7.0	%		30.8		33.1		7.5	%
Total Sales by Product	$	153.2	$	158.7	$	120.0	$	132.3	$	152.5		-0.5	%	$	413.7	$	404.8		-2.2	%
Individual Annuity Deposits
Fixed	$	0.600	$	0.567	$	0.560	$	0.644	$	0.818		36.3	%	$	1.778	$	2.022		13.7	%
Variable		1.424		1.533		1.680		1.877		1.648		15.7	%		4.063		5.206		28.1	%
Indexed annuities		0.197		0.178		0.173		0.228		0.244		23.9	%		0.610		0.645		5.7	%
Total Individual Annuities	$	2.221	$	2.278	$	2.413	$	2.750	$	2.710		22.0	%	$	6.450	$	7.873		22.1	%
Employer Markets
Defined Contribution
Fixed	$	0.259	$	0.240	$	0.253	$	0.242	$	0.268		3.5	%	$	0.843	$	0.763		-9.5	%
Variable		0.553		0.616		0.669		0.714		0.583		5.4	%		1.638		1.966		20.0	%
		0.812		0.856		0.923		0.955		0.851		4.8	%		2.481		2.729		10.0	%
Alliance Mutual Funds Deposits		0.200		0.223		0.318		0.204		0.235		17.5	%		0.843		0.757		-10.2	%
Total Annuity and Alliance Mutual Funds	$	1.012	$	1.078	$	1.241	$	1.159	$	1.086		7.3	%	$	3.325	$	3.486		4.8	%
Executive Benefits
COLI/BOLI sales (millions)	$	16.4	$	12.7	$	17.5	$	17.2	$	16.3		-0.6	%	$	39.6	$	51.0		28.8	%
Group Protection
Annualized Sales (millions)
Life	$	19.3	$	29.4	$	23.6	$	15.3	$	19.4		0.5	%	$	57.3	$	58.3		1.7	%
Disability		30.5		44.5		34.2		22.9		24.7		-19.0	%		96.5		81.8		-15.2	%
Dental		8.0		6.9		6.2		7.1		6.1		-23.8	%		26.8		19.4		-27.6	%
Investment Management
Sales and Inflows
Retail
Annuities	$	0.642	$	0.713	$	0.885	$	0.869	$	0.960		49.5	%	$	2.056	$	2.715		32.1	%
Mutual funds		1.331		1.657		1.329		1.370		1.151		-13.5	%		4.338		3.849		-11.3	%
Managed accounts & other		1.599		1.260		1.806		1.043		0.386		-75.9	%		5.079		3.235		-36.3	%
		3.572		3.629		4.019		3.282		2.497		-30.1	%		11.472		9.799		-14.6	%
Institutional		3.166		4.833		5.044		2.764		2.406		-24.0	%		11.469		10.214		-10.9	%
Total Sales and Inflows	$	6.738	$	8.462	$	9.063	$	6.046	$	4.904		-27.2	%	$	22.941	$	20.013		-12.8	%

Total Annuity & Alliance
Mutual Fund Deposits
Fixed Annuities
Individual	$	0.797	$	0.745	$	0.733	$	0.872	$	1.062	33.2	%	$	2.387	$	2.667	11.7	%
Employer Markets		0.259		0.240		0.253		0.242		0.268	3.5	%		0.843		0.763	-9.5	%
		1.057		0.985		0.986		1.114		1.330	25.8	%		3.230		3.430	6.2	%
Variable Annuities
Individual		1.424		1.533		1.680		1.877		1.648	15.7	%		4.063		5.206	28.1	%
Employer Markets		0.553		0.616		0.669		0.714		0.583	5.4	%		1.638		1.966	20.0	%
		1.976		2.148		2.349		2.591		2.231	12.9	%		5.701		7.172	25.8	%
Total Annuities		3.033		3.134		3.336		3.705		3.561	17.4	%		8.931		10.602	18.7	%
Alliance Mutual Funds		0.200		0.223		0.318		0.204		0.235	17.5	%		0.843		0.757	-10.2	%
Total Annuity and Alliance Mutual Funds	$	3.233	$	3.356	$	3.654	$	3.909	$	3.796	17.4	%	$	9.774	$	11.359	16.2	%

⁽¹⁾ This schedule combines the previously reported data for LNC and JP and does not reflect any adjustments that may have resulted had the merger been completed prior to the periods presented.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 5

Consolidated Expense Detail

Unaudited (In Millions)

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2005			2005			2006			2006			2006			Change			2005			2006			Change
Commissions	$	182.2		$	183.3		$	186.9		$	344.2		$	362.4			98.9	%	$	498.9		$	893.5			79.1	%
General and administrative expenses:
General and administrative expenses		363.4			346.9			314.1			392.9			420.8			15.8	%		1,011.9			1,127.8			11.5	%
Merger-related expenses		-			-			-			7.4			12.1			NM			-			19.5			NM
Total general and administrative expenses excluding Broker/Dealer		363.4			346.9			314.1			400.3			432.9			19.1	%		1,011.9			1,147.3			13.4	%
Restructuring charges		2.7			1.5			0.3			9.6			1.0			-63.0	%		27.8			10.9			-60.8	%
Taxes, licenses and fees		21.4			17.3			33.3			47.3			50.3			135.0	%		78.2			131.0			67.5	%
Interest		21.4			21.8			21.5			65.0			67.3			214.5	%		65.4			153.8			135.2	%
Total commissions and expenses incurred		591.1			570.8			556.1			866.4			914.0			54.6	%		1,720.2			2,336.5			35.8	%
Less: commissions and expenses capitalized		(239.3	)		(263.0	)		(244.5	)		(391.6	)		(424.3	)		-77.3	%		(674.6	)		(1,060.4	)		-57.2	%
Amortization:
DAC/VOBA Amortization		99.1			144.8			165.0			222.2			225.9			128.0	%		396.0			613.1			54.8	%
Amortization of intangibles		2.0			2.0			2.0			5.6			3.1			55.0	%		5.8			10.6			82.8	%
Total amortization		101.1			146.8			167.0			227.7			229.0			126.5	%		401.8			623.7			55.2	%
Broker/Dealer commissions and G & A		49.8			54.2			46.6			79.3			76.6			53.8	%		150.0			202.5			35.0	%
Total	$	502.8		$	508.8		$	525.1		$	781.9		$	795.3			58.2	%	$	1,559.3		$	2,102.3			34.8	%
General & administrative expenses - basis
points on assets - Annualized		127			120			105			102			101			(26	)		113			102			(12	)
Merger-related expenses: (1)
Severance and employee-related charges	$	-		$	-		$	-		$	12.8		$	8.4			NM		$	-		$	21.2			NM
Systems integration and related expenses		-			-			-			0.8			1.5			NM			-			2.3			NM
Other expenses		-			-			-			3.1			3.2			NM			-			6.3			NM
Total merger-related expenses	$	-		$	-		$	-		$	16.7		$	13.1			NM		$	-		$	29.8			NM

⁽¹⁾ Represents merger-related expenses included in general and administrative expenses and restructuring charges.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 6

Operating Results Summary

Unaudited [Millions of Dollars, except Common Share Data]

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2005			2005			2006			2006			2006			Change			2005			2006			Change
Operating Revenue
Individual Life Insurance	$	458.5		$	501.1		$	500.6		$	901.4		$	895.3			95.3	%	$	1,409.4		$	2,297.4			63.0	%
Individual Annuities		362.4			372.1			374.8			552.6			596.5			64.6	%		1,050.4			1,523.9			45.1	%
Individual Markets		820.9			873.2			875.4			1,454.0			1,491.8			81.7	%		2,459.8			3,821.2			55.3	%
Defined Contribution		238.7			241.2			249.2			248.9			245.1			2.7	%		706.3			743.2			5.2	%
Executive Benefits		59.4			61.6			57.2			101.2			104.3			75.6	%		165.8			262.7			58.4	%
Group Protection		-			-			-			354.9			332.1			NM			-			687.0			NM
Employer Markets		298.1			302.8			306.4			704.9			681.5			128.6	%		872.1			1,692.9			94.1	%
Investment Management		123.2			127.9			139.6			134.7			140.4			14.0	%		347.4			414.6			19.3	%
Lincoln UK		102.9			62.6			69.5			81.4			72.3			-29.7	%		255.8			223.2			-12.7	%
Lincoln Financial Media		-			-			-			57.7			60.0			NM			-			117.7			NM
Other Operations		45.9			28.9			31.7			67.6			51.4			12.0	%		146.3			150.7			3.0	%
Total Operating Revenue		1,391.0			1,395.4			1,422.6			2,500.3			2,497.4			79.5	%		4,081.5			6,420.3			57.3	%
																				-			-
Realized gains (losses) on investments and derivatives		(1.6	)		(9.3	)		(6.9	)		(6.7	)		(6.7	)		NM			(12.8	)		(20.3	)		-58.6	%
Net gain (loss) on reinsurance
derivative/trading account securities		5.3			-			5.9			1.8			(3.8	)		NM			4.6			3.9			-15.2	%
Gain on sale of subsidiaries/ businesses		-			-			-			-			-			NM			14.2			-			NM
Amortization of deferred gain-reserve development		0.3			0.3			0.3			0.3			0.3						0.9			1.0			11.1	%
Total Revenue	$	1,395.0		$	1,386.4		$	1,421.8		$	2,495.6		$	2,487.2			78.3	%	$	4,088.4		$	6,404.6			56.7	%
Income from Operations (1)
Individual Life Insurance	$	64.9		$	73.8		$	69.0		$	147.1		$	122.8			89.2	%	$	185.7		$	339.0			82.6	%
Individual Annuities		79.0			70.9			66.4			89.0			129.4			63.8	%		181.1			284.8			57.3	%
Individual Markets		144.0			144.7			135.4			236.1			252.2			75.1	%		366.8			623.8			70.1	%
Defined Contribution		53.4			45.2			52.5			54.3			52.5			-1.7	%		141.9			159.3			12.3	%
Executive Benefits		2.5			9.5			7.5			16.2			12.8			NM			10.1			36.5			261.4	%
Group Protection		-			-			-			37.0			28.8			NM			-			65.8			NM
Employer Markets		55.9			54.7			60.0			107.6			94.0			68.2	%		152.0			261.6			72.1	%
Investment Management		4.8			8.9			15.3			12.0			13.4			179.2	%		7.9			40.8			NM
Lincoln UK		9.6			13.6			10.7			9.9			8.3			-13.5	%		29.7			28.9			-2.7	%
Lincoln Financial Media		-			-			-			11.9			14.6			NM			-			26.5			NM
Other Operations		12.2			9.6			0.1			(26.1	)		(11.5	)		NM			44.7			(37.4	)		NM
Income from Operations (1)		226.3			231.4			221.6			351.4			371.1			64.0	%		601.2			944.1			57.0	%
Realized gains (losses) on investments and derivatives		(1.1	)		(6.1	)		(4.4	)		(3.8	)		(5.0	)		NM			(8.5	)		(13.2	)		-55.3	%
Net gain (loss) on reinsurance
derivative/trading account securities		3.5			-			3.8			1.2			(2.2	)		NM			3.0			2.8			-6.7	%
Gain on sale of subsidiaries/ businesses		-			-			-			-			-			NM			9.3			-			-100.0	%
Reserve development/ amortization of related deferred gain		0.2			0.2			0.2			0.2			0.2						0.6			0.6
Loss on early retirement of debt		-			-			-			-			-			NM			-			-			NM
Net Income	$	228.8		$	225.4		$	221.2		$	349.0		$	364.1			59.1	%	$	605.6		$	934.3			54.3	%

OTHER DATA

	Three Months Ended															Nine Months Ended
	Sept.			Dec.			March			June			Sept.			Sept.			Sept.
	2005			2005			2006			2006			2006			2005			2006
Shareholders' Equity
Beg of period (including AOCI)	$	6,363.5		$	6,284.4		$	6,384.4		$	6,338.2		$	11,404.8		$	6,175.6		$	6,384.4
End of period (including AOCI)		6,284.4			6,384.4			6,338.2			11,404.8			12,043.2			6,284.4			12,043.2
End of period (excluding AOCI)		5,663.5			5,856.6			6,053.2			11,439.8			11,436.0			5,663.5			11,436.0
Average equity (excluding AOCI) (2)		5,555.9			5,760.0			5,954.9			11,311.3			11,437.9			5,422.8			9,568.0
Common Shares Outstanding
Average for the period - diluted		175.8			176.6			177.9			282.6			282.4			175.8			248.0
End of period - diluted		176.3			176.9			178.5			285.0			281.3			176.3			281.3
Per Share Data (Diluted)
Net Income	$	1.30		$	1.28		$	1.24		$	1.23		$	1.29		$	3.44		$	3.76
Income from Operations (1)		1.29			1.31			1.25			1.24			1.31			3.42			3.80
Shareholders' Equity Per Share
Shareholders' Equity (including AOCI)	$	36.23		$	36.69		$	35.99		$	40.48		$	43.39		$	36.23		$	43.39
Shareholders' Equity (excluding AOCI)		32.65			33.66			34.37			40.60			41.20			32.65			41.20
Dividends declared (Common Stock)		0.365			0.380			0.380			0.380			0.380			1.095			1.140
Return on Equity
Net Income/Average Equity		16.5	%		15.7	%		14.9	%		12.3	%		12.7	%		14.9	%		13.0	%
Inc from Operations/Average Equity		16.3	%		16.1	%		14.9	%		12.4	%		13.0	%		14.8	%		13.2	%
Market Value of Common Stock
Highest price	$	52.42		$	54.41		$	57.97		$	60.52		$	63.47		$	52.42		$	63.47
Lowest price		46.59			46.94			52.00			54.30			53.94			41.59			52.00
Closing price	$	52.02		$	53.03		$	54.59		$	56.44		$	62.08		$	52.02		$	62.08

⁽¹⁾ Income from operations includes after-tax restructuring charges of $1.3 million, or 1 cent per share, for the first quarter of 2005; $15.0 million, or 9 cents per share, for the second quarter of 2005; $1.8 million, or 1 cent per share, for the third quarter of 2005; $1.1 million, or 1 cent per share, for the fourth quarter of 2005; $0.2 million, or -0- cents per share, for the first quarter of 2006, $6.2 million, or 2 cents per share, for the second quarter of 2006, and $0.6 million, or -0- cents per share, for the third quarter of 2006.

⁽²⁾ Average equity was adjusted to reflect the merger with Jefferson-Pilot effective April 3, 2006.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 7

Consolidated Statements of Income

Unaudited [Millions of Dollars]

	Three Months Ended																	Nine Months Ended
	Sept.		Dec.			March			June			Sept.			%			Sept.		Sept.			%
	2005		2005			2006			2006			2006			Change			2005		2006			Change
Revenue
Premiums	$	83.1	$	82.4		$	78.4		$	454.3		$	425.7			NM		$	226.0	$	958.4			NM
Surrender charges		18.6		18.0			18.7			27.3			26.6			43.0	%		55.3		72.6			31.3	%
Mortality assessments		138.8		145.1			146.2			294.7			294.9			112.5	%		423.2		735.8			73.9	%
Expense assessments		290.8		294.1			309.5			367.6			355.3			22.2	%		815.9		1,032.4			26.5	%
Investment advisory fees		67.9		70.9			77.8			81.2			82.9			22.1	%		184.9		241.8			30.8	%
Communications revenue		-		-			-			57.5			59.8			NM			-		117.3			NM
Net investment income		670.9		668.2			678.4			1,068.2			1,107.9			65.1	%		2,034.4		2,854.5			40.3	%
Other revenue and fees		101.8		97.6			94.8			130.7			125.6			23.4	%		285.0		351.0			23.2	%
Amortization of deferred gain		18.9		18.9			18.8			18.8			18.8			-0.5	%		56.8		56.3			-0.9	%
Amortization of deferred gain-reserve development		0.3		0.3			0.3			0.3			0.3						0.9		1.0			11.1	%
Realized gains (losses)		3.7		(9.3	)		(1.0	)		(5.0	)		(10.5	)		NM			6.0		(16.5	)		NM
Total Revenue		1,395.0		1,386.3			1,421.8			2,495.6			2,487.2			78.3	%		4,088.4		6,404.6			56.7	%
Benefits and Expenses
Insurance benefits		206.7		198.0			200.4			589.3			566.2			173.9	%		607.5		1,356.0			123.2	%
Interest credited to contractholder funds		382.6		383.4			381.3			589.3			634.4			65.8	%		1,142.8		1,605.0			40.4	%
Communications expenses		-		-			-			29.8			31.4			NM			-		61.2			NM
Operating and acquisition expenses		460.0		469.7			470.3			669.5			677.6			47.3	%		1,415.8		1,817.5			28.4	%
Taxes, licenses and fees		21.4		17.3			33.3			47.3			50.3			135.0	%		78.2		131.0			67.5	%
Interest and debt expense		21.4		21.8			21.5			65.0			67.3			214.5	%		65.4		153.8			135.2	%
Total Benefits and Expenses		1,092.1		1,090.2			1,106.8			1,990.3			2,027.3			85.6	%		3,309.8		5,124.4			54.8	%
Income Before Federal Income Tax		302.8		296.1			315.0			505.3			459.9			51.9	%		778.5		1,280.2			64.4	%
Federal income taxes		74.0		70.6			93.9			156.3			95.8			29.5	%		173.0		346.0			100.0	%
Net Income	$	228.8	$	225.4		$	221.2		$	349.0		$	364.1			59.1	%	$	605.6	$	934.2			54.3	%

Roll Forward of Deferred Acquisition Costs	Three Months Ended															Nine Months Ended
& Value of Business Acquired	Sept.			Dec.			March			June			Sept.			Sept.			Sept.
	2005			2005			2006			2006			2006			2005			2006
Balance at beginning of period	$	4,657.4		$	4,989.1		$	5,163.3		$	5,433.8		$	8,328.4		$	4,590.3		$	5,163.3
Deferral		239.3			263.0			244.5			391.6			424.3			674.6			1,060.4
Amortization		(99.1	)		(144.8	)		(165.0	)		(222.2	)		(225.9	)		(396.0	)		(613.1	)
Included in Total Benefits and Expenses		140.1			118.2			79.6			169.4			198.4			278.7			447.4
Adjustment related to realized (gains) losses
on available-for-sale securities		(13.8	)		(8.7	)		(10.9	)		(18.9	)		(8.9	)		(39.8	)		(38.7	)
Adjustment related to unrealized (gains) losses
on available-for-sale securities		217.4			84.7			194.2			221.5			(359.8	)		228.4			55.8
Foreign currency translation adjustment		(12.1	)		(20.0	)		7.7			48.3			9.7			(68.5	)		65.8
Business acquired		-			-			-			2,474.2			3.8			-			2,478.0
Balance at end of period	$	4,989.1		$	5,163.3		$	5,433.8		$	8,328.4		$	8,171.6		$	4,989.1		$	8,171.6
Roll Forward of Deferred Front-End Load
Balance at beginning of period	$	792.5		$	786.9		$	795.7		$	805.8		$	833.3		$	814.2		$	795.7
Deferral		30.2			33.2			31.1			69.1			71.0			91.7			171.2
Amortization		(29.8	)		(15.0	)		(24.7	)		(37.4	)		(12.7	)		(84.5	)		(74.7	)
Included in Expense Assessments		0.4			18.2			6.4			31.8			58.3			7.1			96.4
Adjustment related to realized (gains) losses
on available-for-sale securities		-			-			-			-			(0.1	)		-			(0.1	)
Foreign currency translation adjustment		(5.9	)		(9.5	)		3.8			23.6			4.7			(34.4	)		32.0
Balance at end of period	$	786.9		$	795.7		$	805.8		$	861.0		$	923.9		$	786.9		$	923.9
Roll Forward of Deferred Sales Inducements
Balance at beginning of period	$	106.6		$	118.1		$	129.4		$	139.9		$	154.6		$	85.5		$	129.4
Deferral		15.1			15.6			15.7			19.9			22.2			43.9			57.8
Amortization		(3.6	)		(4.4	)		(5.2	)		(5.2	)		(3.3	)		(11.3	)		(13.7	)
Included in Income from Operations		11.5			11.3			10.5			14.7			18.9			32.6			44.1
Adjustment related to realized (gains) losses
on available-for-sale securities		-			-			-			-			(0.1	)		-			(0.1	)
Balance at end of period	$	118.1		$	129.4		$	139.9		$	154.6		$	173.4		$	118.1		$	173.4

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 8

Consolidating Statements of Income from Operations

Unaudited [Millions of Dollars]

For the Quarter Ended September 30, 2006

	Individual Markets				Employer Markets
	Life		Annuities		Defined Contribution		Executive Benefits		Group Protection		Investment Management		Lincoln UK		Lincoln Financial Media		Other Operations			Consolidating Adjustments			Consolidated
Operating Revenue
Premiums	$	87.0	$	12.3	$	-	$	0.3	$	304.1	$	-	$	21.1	$	-	$	0.9		$	-		$	425.7
Surrender charges		18.3		6.6		1.7		0.0		-		-		-		-		-			-			26.6
Mortality assessments		278.9		-		-		7.2		-		-		8.7		-		-			-			294.9
Expense assessments		83.6		189.3		54.0		4.5		-		-		23.9		-		(0.0	)		-			355.3
Investment advisory fees		-		-		-		-		-		106.1		-		-		-			(23.3	)		82.9
Communications revenue		-		-		-		-		-		-		-		59.8		-			-			59.8
Net investment income		414.4		312.7		184.6		91.0		27.1		-		18.6		0.1		60.3			(0.7	)		1,107.9
Amortization of deferred gain		-		-		-		-		-		-		-		-		18.8			-			18.8
Other revenue and fees		13.1		75.7		4.9		1.3		0.9		34.3		0.0		-		5.8			(10.3	)		125.6
Total Operating Revenue		895.3		596.5		245.1		104.3		332.1		140.4		72.3		60.0		85.7			(34.3	)		2,497.4
Operating Expenses
Insurance benefits		261.1		27.4		-		35.6		213.3		-		25.0		-		3.9			-			566.2
Interest credited to contractholder funds		247.1		208.2		103.1		39.9		-		-		-		-		36.1			-			634.4
Communications expenses		-		-		-		-		-		-		-		31.4		-			-			31.4
Operating and acquisition expenses		179.3		222.4		73.2		10.3		66.8		117.6		34.5		4.1		3.3			(33.8	)		677.6
Taxes, licenses and fees		28.3		4.8		1.3		1.4		7.8		2.7		-		1.5		2.6			(0.0	)		50.3
Interest		-		0.1		-		-		-		-		-		0.4		67.2			(0.5	)		67.3
Total Operating Expenses		715.7		462.9		177.6		87.2		287.9		120.3		59.5		37.4		113.1			(34.3	)		2,027.3
Income (Loss) from Operations before Federal income taxes		179.6		133.6		67.5		17.1		44.2		20.1		12.8		22.6		(27.4	)		-			470.1
Federal income taxes		56.8		4.2		15.0		4.3		15.5		6.7		4.5		8.0		(15.9	)		-			99.0
Income from Operations	$	122.8	$	129.4	$	52.5	$	12.8	$	28.8	$	13.4	$	8.3	$	14.6	$	(11.5	)	$	-		$	371.1

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 9

Consolidating Statements of Income from Operations

Unaudited [Millions of Dollars]

For the Quarter Ended September 30, 2005

	Individual Markets				Employer Markets
	Life		Annuities		Defined Contribution			Executive Benefits			Group Protection		Investment Management		Lincoln UK		Lincoln Financial Media		Other Operations			Consolidating Adjustments			Consolidated
Operating Revenue
Premiums	$	47.4	$	10.7	$	-		$	7.4		$	-	$	-	$	16.9	$	-	$	0.6		$	-		$	83.1
Surrender charges		10.9		5.0		2.8			(0.1	)		-		-		-		-		-			-			18.6
Mortality assessments		127.7		-		-			2.0			-		-		9.0		-		-			-			138.8
Expense assessments		31.7		147.7		51.8			3.7			-		-		56.0		-		-			-			290.8
Investment advisory fees		-		-		-			-			-		92.8		-		-		-			(24.9	)		67.9
Communications revenue		-		-		-			-			-		-		-		-		-			-			-
Net investment income		229.5		151.7		177.5			45.1			-		-		20.9		-		47.1			(0.9	)		670.9
Amortization of deferred gain		-		-		-			-			-		-		-		-		18.9			-			18.9
Other revenue and fees		11.2		47.3		6.6			1.3			-		30.4		-		-		1.2			3.9			101.8
Total Operating Revenue		458.5		362.4		238.7			59.4			-		123.2		102.9		-		67.9			(22.0	)		1,391.0
												-
Operating Expenses
Insurance benefits		109.9		20.5		-			39.9			-		-		35.5		-		0.8			-			206.7
Interest credited to contractholder funds		140.9		97.3		100.7			10.4			-		-		-		-		33.3			-			382.6
Communications expenses		-		-		-			-			-		-		-		-		-			-			-
Operating and acquisition expenses		98.5		134.7		63.0			4.9			-		112.5		52.7		-		15.0			(21.3	)		460.0
Taxes, licenses and fees		12.4		5.0		(0.8	)		1.5			-		2.5		-		-		0.7			-			21.4
Interest		-		-		-			-			-		-		-		-		22.1			(0.7	)		21.4
Total Operating Expenses		361.8		257.6		162.9			56.8			-		115.0		88.2		-		71.9			(22.0	)		1,092.1
Income (Loss) from Operations before Federal income taxes		96.7		104.8		75.8			2.7			-		8.2		14.7		-		(4.0	)		-			298.8
Federal income taxes		31.8		25.8		22.4			0.2			-		3.4		5.1		-		(16.3	)		-			72.4
Income from Operations	$	64.9	$	79.0	$	53.4		$	2.5		$	-	$	4.8	$	9.6	$	-	$	12.2		$	-		$	226.3

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 10

Consolidating Statements of Income from Operations

Unaudited [Millions of Dollars]

Nine Months Ended September 30, 2006

	Individual Markets				Employer Markets
	Life		Annuities		Defined Contribution		Executive Benefits		Group Protection		Investment Management		Lincoln UK		Lincoln Financial Media		Other Operations			Consolidating Adjustments			Consolidated
Operating Revenue
Premiums	$	228.0	$	36.8	$	-	$	1.4	$	633.1	$	-	$	57.6	$	-	$	1.6		$	-		$	958.4
Surrender charges		44.2		22.4		6.1		0.0		-		-		-		-		-			-			72.6
Mortality assessments		691.9		-		-		18.5		-		-		25.4		-		(0.0	)		-			735.8
Expense assessments		228.5		540.0		164.3		12.6		-		-		86.7		-		0.3			-			1,032.4
Investment advisory fees		-		-		-		-		-		313.6		-		-		-			(71.8	)		241.8
Communications revenue		-		-		-		-		-		-		-		117.3		-			-			117.3
Net investment income		1,069.8		723.8		557.8		226.1		52.2		-		53.4		0.3		173.3			(2.4	)		2,854.5
Amortization of deferred gain		-		-		-		-		-		-		-		-		56.3			-			56.3
Other revenue and fees		35.0		200.8		15.1		4.0		1.7		101.0		0.1		-		12.1			(18.7	)		351.0
Total Operating Revenue		2,297.4		1,523.9		743.2		262.7		687.0		414.6		223.2		117.7		243.5			(92.9	)		6,420.3
Operating Expenses
Insurance benefits		637.3		93.1		0.0		98.8		439.3		-		77.8		-		9.6			-			1,356.0
Interest credited to contractholder funds		630.8		472.1		306.2		89.4		-		-		-		-		106.6			-			1,605.0
Communications expenses		-		-		-		-		-		-		-		61.2		-			-			61.2
Operating and acquisition expenses		451.2		601.6		210.2		19.7		130.8		342.9		100.9		11.9		39.6			(91.2	)		1,817.5
Taxes, licenses and fees		72.1		14.9		7.1		3.7		15.8		9.9		-		1.5		6.0			0.0			131.0
Interest		0.0		0.3		0.0		-		-		-		-		0.9		154.2			(1.7	)		153.8
Total Operating Expenses		1,791.4		1,182.0		523.5		211.5		585.9		352.7		178.8		75.5		316.0			(92.9	)		5,124.4
Income (Loss) from Operations before Federal income taxes		505.9		341.8		219.7		51.1		101.2		61.9		44.4		42.2		(72.4	)		-			1,295.8
Federal income taxes		167.0		57.0		60.4		14.6		35.4		21.2		15.5		15.7		(35.0	)		-			351.8
Income from Operations	$	339.0	$	284.8	$	159.3	$	36.5	$	65.8	$	40.8	$	28.9	$	26.5	$	(37.4	)	$	-		$	944.1

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 11

Consolidating Statements of Income from Operations

Unaudited [Millions of Dollars]

Nine Months Ended September 30, 2005

	Individual Markets				Employer Markets
	Life		Annuities		Defined Contribution		Executive Benefits			Group Protection		Investment Management		Lincoln UK		Lincoln Financial Media		Other Operations			Consolidating Adjustments			Consolidated
Operating Revenue
Premiums	$	140.7	$	28.6	$	-	$	7.9		$	-	$	-	$	47.9	$	-	$	0.9		$	-		$	226.0
Surrender charges		32.3		15.5		7.9		(0.4	)		-		-		-		-		-			-			55.3
Mortality assessments		389.4		-		-		6.3			-		-		27.4		-		-			-			423.2
Expense assessments		130.9		403.9		148.9		12.5			-		-		119.6		-		-			-			815.9
Investment advisory fees		-		-		-		-			-		259.2		-		-		-			(74.3	)		184.9
Communications revenue		-		-		-		-			-		-		-		-		-			-			-
Net investment income		681.2		463.4		530.2		135.7			-		-		60.8		-		166.0			(3.0	)		2,034.4
Amortization of deferred gain		-		-		-		-			-		-		-		-		56.8			-			56.8
Other revenue and fees		34.9		139.0		19.3		3.8			-		88.1		0.1		-		3.6			(3.6	)		285.0
Total Operating Revenue		1,409.4		1,050.4		706.3		165.8			-		347.4		255.8		-		227.3			(80.9	)		4,081.5
Operating Expenses
Insurance benefits		342.8		73.1		-		102.5			-		-		88.5		-		0.6			-			607.5
Interest credited to contractholder funds		417.8		296.4		300.7		29.4			-		-		-		-		98.6			-			1,142.8
Communications expenses		-		-		-		-			-		-		-		-		-			-			-
Operating and acquisition expenses		331.2		434.4		200.8		18.4			-		326.8		121.4		-		61.6			(78.7	)		1,415.8
Taxes, licenses and fees		41.8		15.2		6.5		3.4			-		7.8		-		-		3.3			-			78.2
Interest		-		-		-		-			-		-		-		-		67.6			(2.2	)		65.4
Total Operating Expenses		1,133.6		819.1		508.0		153.7			-		334.6		210.0		-		231.7			(80.9	)		3,309.8
																			-
Income (Loss) from Operations before Federal income taxes		275.9		231.3		198.3		12.1			-		12.8		45.9		-		(4.4	)		-			771.7
Federal income taxes		90.2		50.1		56.4		2.0			-		4.9		16.1		-		(49.2	)		-			170.5
Income from Operations	$	185.7	$	181.1	$	141.9	$	10.1		$	-	$	7.9	$	29.7	$	-	$	44.7		$	-		$	601.2

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 12

Consolidated Balance Sheet

Unaudited [Millions of Dollars, except Common Share Data]

	Sept.			Dec.			March			June			Sept.
	2005			2005			2006			2006			2006
ASSETS
Investments						��
Corporate bonds	$	26,453.6		$	25,860.7		$	25,418.0		$	43,881.6		$	45,345.3
U.S. government bonds		158.3			161.8			173.4			287.6			291.6
Foreign government bonds		1,195.0			1,203.3			1,169.7			1,188.0			1,144.4
Mortgage backed securities		6,237.1			5,951.2			5,868.8			8,370.3			8,765.1
State and municipal bonds		157.9			128.8			126.0			166.5			160.7
Preferred stocks - redeemable		123.0			137.4			136.9			130.1			117.8
Common stocks		62.2			55.9			61.0			458.8			506.3
Preferred stocks-equity		89.4			88.8			115.0			119.7			155.7
Total AFS Securities		34,476.5			33,587.9			33,068.8			54,602.6			56,486.9
Trading securities		3,287.0			3,246.0			3,190.1			3,109.0			3,172.5
Mortgage loans		3,696.2			3,662.6			3,586.2			7,741.2			7,580.5
Real estate		196.6			182.7			180.4			428.6			424.0
Policy loans		1,856.4			1,862.2			1,860.4			2,716.4			2,724.9
Other long-term investments		572.3			626.9			687.5			1,116.6			1,218.7
Total Investments		44,085.0			43,168.4			42,573.2			69,714.4			71,607.5
Cash and invested cash		1,601.9			2,311.7			1,974.0			1,499.8			1,108.3
Premiums and fees receivable		332.6			343.2			363.2			343.9			345.6
Accrued investment income		565.2			526.4			532.1			879.0			928.2
Amount recoverable from reinsurers		7,211.0			6,926.3			6,899.4			7,967.2			8,007.3
Deferred acquisition costs and VOBA		4,989.0			5,163.2			5,433.7			8,328.4			8,171.6
Goodwill		1,194.6			1,194.2			1,194.4			4,502.6			4,498.0
Other		1,379.5			1,479.3			1,517.7			3,049.6			2,703.1
Assets held in separate accounts		60,811.5			63,746.8			67,984.2			71,095.2			74,357.1
Total Assets	$	122,170.2		$	124,859.6		$	128,472.0		$	167,380.0		$	171,726.6
LIABILITIES and SHAREHOLDERS' EQUITY
Liabilities
Insurance and Investment Contract Liabilities:
Reserves	$	10,981.4		$	10,659.7		$	10,657.2		$	13,512.1		$	13,513.4
Unpaid claims		1,038.9			1,042.9			981.3			1,211.7			1,206.9
Premium deposit funds		21,932.7			21,713.3			21,448.6			21,198.4			20,708.6
Policyholders' funds		13,637.9			13,878.8			13,991.5			37,430.3			37,808.3
Total Insurance and Investment Contract Liabilities		47,590.9			47,294.8			47,078.6			73,352.5			73,237.2
Short-term debt		165.1			119.9			10.6			561.0			559.2
Long-term debt - senior notes		999.5			999.0			998.5			2,329.1			2,330.4
Long-term debt - subordinated
Capital securities		-			-			-			1,071.8			1,071.9
Junior subordinated debentures issued to
affiliated trusts		335.9			334.0			332.3			330.5			332.5
Embedded derivative - modco		314.1			292.2			192.0			126.7			232.5
Deferred gain on indemnity reinsurance		855.2			836.0			816.9			797.8			778.7
Federal income taxes		31.5			19.8			-			563.8			911.1
Other liabilities		4,782.1			4,832.8			4,720.7			5,746.7			5,872.8
Liabilities related to separate accounts		60,811.5			63,746.8			67,984.2			71,095.2			74,357.1
Total Liabilities		115,885.8			118,475.2			122,133.8			155,975.2			159,683.5
Preferred Stock		0.5			0.5			0.5			0.5			0.5
Capital stock		1,740.2			1,774.6			1,817.5			7,425.7			7,448.7
Retained earnings		3,922.8			4,081.5			4,235.2			4,013.7			3,986.7
Unrealized gains on investments		569.0			496.6			220.2			(151.5	)		478.0
Gains - derivatives		8.9			7.3			35.2			51.5			55.9
Foreign currency		99.6			83.4			89.7			128.5			136.5
Minimum pension liability		(56.6	)		(59.5	)		(60.1	)		(63.6	)		(63.2	)
Total Shareholders' Equity		6,284.4			6,384.4			6,338.2			11,404.8			12,043.2
Total Liabilities and Shareholders' Equity	$	122,170.2		$	124,859.6		$	128,472.0		$	167,380.0		$	171,726.6
Shareholders' Equity Per Share	$	36.23		$	36.69		$	35.99		$	40.48		$	43.39
Book Value, Excluding AOCI	$	32.65		$	33.66		$	34.37		$	40.60		$	41.20
Common shares outstanding (in millions)		173.5			174.0			176.1			281.8			277.6

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 13

Balance Sheet Data - Segment Highlights

Unaudited [Millions of Dollars]

	Individual				Employer
	Markets				Markets
As of September 30, 2006	Annuities		Life		Defined Contribution		Executive Benefits		Group Protection		Investment Management		Lincoln UK		Lincoln Financial Media		Other Operations (1)			Consolidated
Assets
Allocated Investments	$	19,004.9	$	27,376.5	$	11,900.1	$	5,723.8	$	1,804.6	$	-	$	1,070.6	$	-	$	4,727.1		$	71,607.5
DAC and VOBA		1,974.1		4,524.7		503.8		258.0		126.1		-		783.4		-		1.5			8,171.6
Goodwill		1,031.6		2,181.3		20.2		-		281.0		260.8		15.5		707.6		-			4,498.0
Other intangibles		173.4		98.0		-		-		-		9.0		-		665.0		-			945.3
Amounts recoverable from reinsurers		928.0		1,759.5		-		4.4		28.7		-		67.3		-		5,219.5			8,007.3
Assets held in separate accounts		43,823.8		4,678.1		16,514.7		807.4		-		-		8,118.1		-		415.1			74,357.1
Liabilities and Capital
Insurance and Investment Contract Liabilities:
Insurance policy & claim reserves		473.0		5,606.4		0.0		1,777.9		1,164.4		-		1,073.1		-		4,625.6			14,720.3
Contractholder funds		18,660.9		23,002.5		11,040.9		3,666.7		16.6		-		424.7		-		1,704.6			58,516.9
Total Insurance and Inv Contract Liabilities		19,133.9		28,608.9		11,040.9		5,444.6		1,181.0		-		1,497.8		-		6,330.2			73,237.2
Allocated capital (2)	$	3,334.8	$	7,214.7	$	954.7	$	524.7		903.8		327.8		399.7		874.9		(3,099.1	)	$	11,436.0
As of December 31, 2005
Assets
Allocated Investments	$	8,104.7	$	14,990.3	$	13,666.6	$	2,879.4	$	-	$	-	$	996.6	$	-	$	2,530.8		$	43,168.4
DAC and VOBA		1,559.3		2,543.9		151.6		113.6		-		-		743.4		-		51.4			5,163.2
Goodwill		43.9		855.1		20.2		-		-		260.8		14.3		-		-			1,194.2
Other intangibles		129.4		-		-		-		-		13.9		-		-		-			143.3
Amounts recoverable from reinsurers		1,085.9		1,270.2		-		2.8		-		-		59.9		-		4,507.5			6,926.3
Assets held in separate accounts		37,903.9		2,482.7		15,243.9		796.7		-		-		7,319.6		-		-			63,746.8
Liabilities and Capital
Insurance and Investment Contract Liabilities:
Insurance policy & claim reserves		439.6		3,561.2		-		1,914.9		-		-		1,013.7		-		4,773.2			11,702.7
Contractholder funds		8,619.8		12,868.0		11,033.4		752.4		-		-		396.4		-		1,922.1			35,592.1
Total Insurance and Inv Contract Liabilities		9,059.4		16,429.2		11,033.4		2,667.3		-		-		1,410.1		-		6,633.0			47,232.4
Allocated capital (2)		1,785.0		3,231.9		978.7		346.0		-		360.0		430.6		-		(1,275.6	)	$	5,856.6

⁽¹⁾ Includes consolidating adjustments.

⁽²⁾ Allocated capital is based on internal economic capital models plus certain other items (principally intangibles including DAC and VOBA, goodwill and other items).

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 14

Individual Markets - Individual Life Insurance

Income Statements & Operational Data

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2005			2005			2006			2006			2006			Change			2005			2006			Change
Operating Revenue
Premiums	$	47.4		$	57.7		$	51.1		$	89.9		$	87.0			83.5	%	$	140.7		$	228.0			62.0	%
Surrender charges		10.9			11.6			10.3			15.5			18.3			67.9	%		32.3			44.2			36.8	%
Mortality assessments		127.7			135.3			135.6			277.3			278.9			118.4	%		389.4			691.9			77.7	%
Expense assessments		31.7			58.8			54.3			90.6			83.6			163.7	%		130.9			228.5			74.6	%
Net investment income		229.5			227.5			239.5			415.9			414.4			80.6	%		681.2			1,069.8			57.0	%
Other revenue and fees		11.2			10.3			9.7			12.2			13.1			17.0	%		34.9			35.0			0.3	%
Total Operating Revenue		458.5			501.1			500.6			901.4			895.3			95.3	%		1,409.4			2,297.4			63.0	%
Operating Expenses
Insurance benefits		109.9			118.6			120.2			256.0			261.1			137.6	%		342.8			637.3			85.9	%
Interest credited to contractholder funds		140.9			142.1			142.2			241.5			247.1			75.4	%		417.8			630.8			51.0	%
Operating and acquisition expenses		110.9			130.1			132.8			182.9			207.6			87.2	%		373.0			523.3			40.3	%
Total Operating Expenses		361.8			390.8			395.3			680.4			715.7			97.8	%		1,133.6			1,791.4			58.0	%
Income from operations before Federal income taxes		96.7			110.4			105.3			221.0			179.6			85.7	%		275.9			505.9			83.4	%
Federal income taxes		31.8			36.5			36.3			73.9			56.8			78.6	%		90.2			167.0			85.1	%
Income from Operations	$	64.9		$	73.8		$	69.0		$	147.1		$	122.8			89.2	%	$	185.7		$	339.0			82.6	%
Effective tax rate		32.8	%		33.1	%		34.5	%		33.4	%		31.6	%					32.7	%		33.0	%
Average equity	$	3,212.8		$	3,278.0		$	3,266.0		$	7,051.8		$	7,223.9					$	3,182.7		$	5,847.2
Return on average equity		8.1	%		9.0	%		8.5	%		8.3	%		6.8	%					7.8	%		7.7	%
Operating and Acquisition Expenses
Commissions	$	43.4		$	50.3		$	44.2		$	125.4		$	141.4			226.1	%	$	116.2		$	311.0			167.6	%
General and administrative expenses		105.3			105.6			88.9			123.0			148.2			40.7	%		291.6			360.1			23.5	%
Taxes, licenses and fees		12.4			12.9			16.3			27.5			28.3			127.5	%		41.8			72.1			72.5	%
Total commissions and expenses incurred		161.1			168.7			149.4			275.9			317.9			97.3	%		449.6			743.2			65.3	%
Less: commissions and expenses capitalized		(94.7	)		(113.8	)		(90.1	)		(199.8	)		(226.6	)		NM			(260.0	)		(516.5	)		-98.7	%
Amortization of DAC and VOBA		44.6			75.2			73.6			106.7			116.3			161.1	%		183.5			296.6			61.6	%
Net Operating and Acquisition Expenses	$	110.9		$	130.1		$	132.8		$	182.9		$	207.6			87.1	%	$	373.0		$	523.3			40.3	%
General and administrative expenses -
basis points on account values - Annualized		309			304			251			194			231			(78	)		288			221			(67	)
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	2,350.0		$	2,479.9		$	2,543.9		$	2,643.8		$	4,592.2					$	2,359.0		$	2,543.9
Deferral		94.7			113.8			90.1			199.8			226.6						260.0			516.5
Amortization		(44.6	)		(75.2	)		(73.6	)		(106.7	)		(116.3	)					(183.5	)		(296.6	)
Included in Total Operating Expenses		50.1			38.6			16.6			93.0			110.3						76.4			219.9
Adjustment related to realized (gains) losses
on available-for-sale securities		(6.1	)		(1.2	)		(3.4	)		(7.9	)		(3.8	)					(14.2	)		(15.1	)
Adjustment related to unrealized (gains) losses
on available-for-sale securities		85.9			26.5			86.7			96.7			(174.0	)					58.5			9.4
Business acquired											1,766.6			-						-			1,766.6
Other		-			0.1			-			-			-						0.1			-
Balance at end of period	$	2,479.9		$	2,543.9		$	2,643.8		$	4,592.2		$	4,524.7					$	2,479.9		$	4,524.7
Roll Forward of Deferred Front-End Loads
Balance at beginning of period	$	315.9		$	338.5		$	342.6		$	344.3		$	375.3					$	311.1		$	342.6
Deferral		19.0			21.8			19.7			57.8			58.9						59.2			136.4
Amortization		3.6			(17.6	)		(18.0	)		(26.8	)		(18.3	)					(31.9	)		(63.1	)
Included in Expense Assessments		22.6			4.2			1.7			31.0			40.6						27.3			73.3
Balance at end of period	$	338.5		$	342.6		$	344.3		$	375.3		$	415.9					$	338.5		$	415.9

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 15

Individual Markets- Individual Life Insurance

Operational Data

Unaudited [Millions of Dollars]

	Three Months Ended													Nine Months Ended
	Sept.		Dec.		March		June		Sept.		%			Sept.		Sept.		%
	2005		2005		2006		2006		2006		Change			2005		2006		Change
Sales by Product(Millions)(1)
Universal Life
Excluding MoneyGuard	$	46.3	$	59.6	$	41.3	$	97.5	$	119.9		159.0	%	$	132.1	$	258.6		95.8	%
MoneyGuard		9.1		9.4		7.7		7.5		8.3		-8.8	%		24.5		23.5		-4.1	%
Total		55.4		69.0		49.0		105.0		128.2		131.4	%		156.6		282.1		80.1	%
Variable universal life		9.1		13.4		10.0		15.7		13.0		42.9	%		28.8		38.7		34.4	%
Whole life		0.4		0.4		0.7		0.4		0.7		75.0	%		1.4		1.7		21.4	%
Term		8.1		7.9		8.2		11.3		10.7		32.1	%		25.8		30.2		17.1	%
Total	$	72.9	$	90.7	$	67.9	$	132.3	$	152.5		109.2	%	$	212.6	$	352.8		65.9	%
First-Year Paid Premiums (Millions)
Universal Life
Excluding MoneyGuard	$	102.3	$	144.0	$	108.2	$	261.2	$	269.0		163.0	%	$	292.3	$	638.5		118.4	%
MoneyGuard		60.8		62.5		51.5		50.0		54.8		-9.9	%		163.6		156.4		-4.4	%
Total		163.1		206.5		159.7		311.2		323.9		98.6	%		455.9		794.8		74.3	%
Variable universal life		23.4		33.4		27.1		40.5		34.4		47.0	%		73.1		102.0		39.5	%
Whole life		10.2		14.4		8.3		9.5		12.0		17.6	%		26.3		29.8		13.3	%
Term		8.6		8.4		8.6		11.5		10.4		20.9	%		27.5		30.4		10.5	%
Total	$	205.3	$	262.7	$	203.7	$	372.7	$	380.6		85.4	%	$	582.8	$	957.0		64.2	%
Life Insurance In-Force (Billions)
Universal life & other	$	126.976	$	128.791	$	129.584	$	260.945	$	263.485		107.5	%	$	126.976	$	263.485		107.5	%
Term insurance		184.334		187.850		191.825		229.082		232.214		26.0	%		184.334		232.214		26.0	%
Total Life Segment In-Force	$	311.310	$	316.641	$	321.409	$	490.027	$	495.699		59.2	%	$	311.310	$	495.699		59.2	%

⁽¹⁾ Sales for Individual Life Insurance consist of first year commissionable premium for Universal life ("UL"), including Moneyguard, including UL internal replacements, and first year paid premiums for Whole life and Term products.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 16

Individual Markets - Individual Life Insurance

Account Value Roll Forward

Unaudited [Billions of Dollars]

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2005			2005			2006			2006			2006			Change			2005			2006			Change
Interest Sensitive Life-Balance Beginning-of-Period	$	11.443		$	11.591		$	11.809		$	11.913		$	21.285			86.0	%	$	11.232		$	11.809			5.1	%
Business acquired		-			-			-			9.150			-			NM			-			9.150			NM
Deposits		0.415			0.499			0.401			0.799			0.717			72.8	%		1.186			1.917			61.6	%
Withdrawals & deaths		(0.161	)		(0.160	)		(0.182	)		(0.317	)		(0.275	)		-70.8	%		(0.515	)		(0.775	)		-50.5	%
Net flows		0.253			0.339			0.219			0.482			0.442			74.7	%		0.670			1.143			70.6	%
Policyholder assessments		(0.242	)		(0.257	)		(0.250	)		(0.493	)		(0.451	)		-86.4	%		(0.719	)		(1.194	)		-66.1	%
Interest credited		0.136			0.136			0.135			0.233			0.241			77.2	%		0.408			0.609			49.3	%
Interest Sensitive Life-Balance End-of-Period (1)	$	11.591		$	11.809		$	11.913		$	21.285		$	21.516			85.6	%	$	11.591		$	21.516			85.6	%
Variable Universal Life-Balance Beginning of Period	$	2.053		$	2.154		$	2.242		$	2.355		$	4.194			104.3	%	$	2.028		$	2.242			10.6	%
Business acquired		-			-			-			1.918			-			NM			-			1.918			NM
Deposits		0.082			0.097			0.087			0.224			0.036			-56.1	%		0.249			0.346			39.0	%
Withdrawals & deaths		(0.041	)		(0.036	)		(0.049	)		(0.158	)		0.013			NM			(0.125	)		(0.194	)		-55.2	%
Net flows		0.041			0.061			0.038			0.066			0.049			19.5	%		0.124			0.153			23.4	%
Policyholder assessments		(0.043	)		(0.044	)		(0.044	)		(0.077	)		(0.076	)		-76.7	%		(0.126	)		(0.197	)		-56.3	%
Investment income and change in market value		0.103			0.071			0.119			(0.068	)		0.137			33.0	%		0.129			0.189			46.5	%
Variable Universal Life -Balance End-of-Period	$	2.154		$	2.242		$	2.355		$	4.194		$	4.305			99.9	%	$	2.154		$	4.305			99.9	%
Total Segment- Life Insurance Account Value Roll Forward
Balance Beginning-of-Period	$	13.496		$	13.745		$	14.051		$	14.268		$	25.479			88.8	%	$	13.259		$	14.051			6.0	%
Business acquired		-			-			-			11.068			-			NM			-			11.068			NM
Deposits		0.497			0.596			0.488			1.023			0.753			51.5	%		1.435			2.264			57.8	%
Withdrawals & deaths		(0.202	)		(0.196	)		(0.231	)		(0.476	)		(0.262	)		-29.7	%		(0.640	)		(0.968	)		-51.3	%
Net flows		0.295			0.400			0.257			0.548			0.491			66.4	%		0.794			1.296			63.2	%
Policyholder assessments		(0.285	)		(0.301	)		(0.294	)		(0.571	)		(0.526	)		-84.6	%		(0.846	)		(1.391	)		-64.4	%
Investment income and change in market value		0.239			0.206			0.254			0.165			0.379			58.6	%		0.537			0.798			48.6	%
Total Segment -Balance End-of-Period	$	13.745		$	14.051		$	14.268		$	25.479		$	25.821			87.9	%	$	13.745		$	25.821			87.9	%
Life Product Spread Information (2)
																	Change									Change
Interest Sensitive Products																	(Basis Points)									(Basis Points)
Net investment income (3) (4)		6.35	%		6.26	%		6.48	%		6.22	%		6.08	%		(27	)		6.35	%		6.23	%		(12	)
Interest credited to policyholders		4.70	%		4.66	%		4.60	%		4.46	%		4.52	%		(18	)		4.69	%		4.51	%		(18	)
Spread (3)(4)		1.65	%		1.60	%		1.88	%		1.76	%		1.57	%		(8	)		1.66	%		1.72	%		6
Traditional Products
Net investment income (3)		6.62	%		6.42	%		6.72	%		6.59	%		6.60	%		(2	)		6.59	%		6.63	%		4

⁽¹⁾ Includes universal life, interest sensitive life, and the 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 traditional investment portfolios divided by average earning assets. As of September 30, 2006, interest sensitive products represented approximately 81% of total interest sensitive and traditional 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 20 bps in the 3rd quarter of 2006, 13 bps in the 2nd quarter of 2006, 7 bps in the 1st quarter of 2006, 8 bps in the 4th quarter of 2005 and 4 bps in the 3rd quarter of 2005. The impact was 15 basis points for the first nine months of 2006 and 5 basis points for the first nine months of 2005. There was an impact on traditional products of 15 bps in the 3rd quarter of 2006, 14 bps in the 2nd quarter of 2006, 15 bps in the 1st quarter of 2006, 0 bps in the 4th quarter of 2005 and 20 bps in the 3rd quarter of 2005. The impact was 15 basis points for the first nine months of 2006 and 14 basis points for the first nine months of 2005.

⁽⁴⁾ The net investment income and spread for the first, second and third quarters of 2006 include 17 basis points, 2 basis points and -22 basis points, respectively, of incremental yield from special investments. The impact was -5 basis points for the first nine months of 2006 and 3 basis points for the first nine months of 2005.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 17

Individual Markets - Individual Annuities

Income Statements & Operational Data

Unaudited [Millions of Dollars]

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2005			2005			2006			2006			2006			Change			2005			2006			Change
Operating Revenue
Premiums	$	10.7		$	8.5		$	9.3		$	15.3		$	12.3			15.0	%	$	28.6		$	36.8			28.6	%
Surrender charges		5.0			4.4			6.2			9.6			6.6			32.0	%		15.5			22.4			44.4	%
Expense assessments		147.7			155.5			168.0			182.7			189.3			28.2	%		403.9			540.0			33.7	%
Net investment income		151.7			150.4			148.0			263.2			312.7			106.1	%		463.4			723.8			56.2	%
Other revenue and fees (1)		47.3			53.3			43.4			81.8			75.7			60.0	%		139.0			200.8			44.4	%
Total Operating Revenue		362.4			372.1			374.8			552.6			596.5			64.6	%		1,050.4			1,523.9			45.1	%
Operating Expenses
Insurance benefits		20.5			21.2			20.4			45.3			27.4			33.7	%		73.1			93.1			27.3	%
Interest credited to contractholder funds		97.3			96.3			95.1			168.8			208.2			114.0	%		296.4			472.1			59.3	%
Operating and acquisition expenses		139.8			164.7			172.6			216.9			227.3			62.6	%		449.6			616.8			37.2	%
Total Operating Expenses		257.6			282.2			288.1			431.0			462.9			79.7	%		819.1			1,182.0			44.3	%
Income from operations before Federal income taxes		104.8			89.9			86.7			121.5			133.6			27.5	%		231.3			341.8			47.8	%
Federal income taxes		25.8			19.0			20.3			32.5			4.2			-83.7	%		50.1			57.0			13.7	%
Income from Operations	$	79.0		$	70.9		$	66.4		$	89.0		$	129.4			63.8	%	$	181.1		$	284.8			57.2	%
Effective tax rate		24.6	%		21.1	%		23.4	%		26.7	%		3.1	%					21.7	%		16.7	%
Average equity	$	1,713.7		$	1,773.7		$	1,744.1		$	3,269.2		$	3,310.4					$	1,694.2		$	2,774.6
Return on average equity		18.5	%		16.0	%		15.2	%		10.9	%		15.6	%					14.3	%		13.7	%
Basis points on average account values		69			60			52			58			84						55			66
Operating and Acquisition Expenses
Commissions	$	101.8		$	100.4		$	111.2		$	141.0		$	146.1			43.5	%	$	283.6		$	398.3			40.4	%
General and administrative expenses		68.4			70.9			66.2			69.3			81.9			19.7	%		200.6			217.4			8.4	%
Broker-dealer commissions and general and administrative expenses		49.8			54.2			46.6			79.3			76.6			53.8	%		150.0			202.5			35.0	%
Taxes, licenses and fees		5.0			(1.4	)		5.4			4.6			4.8			-4.0	%		15.2			14.9			-2.4	%
Total commissions and expenses incurred		225.0			224.1			229.5			294.2			309.4			37.5	%		649.4			833.0			28.3	%
Less: commissions and expenses capitalized		(112.1	)		(118.9	)		(122.7	)		(150.0	)		(157.6	)		-40.6	%		(323.0	)		(430.3	)		-33.2	%
Amortization of DAC and VOBA		26.8			59.5			65.8			72.7			75.6			182.1	%		123.2			214.0			73.8	%
Net Operating and Acquisition Expenses	$	139.8		$	164.7		$	172.6		$	216.9		$	227.3			62.6	%	$	449.6		$	616.8			37.2	%
General and administrative expenses - basis points on gross account values - Annualized(2)		60			60			52			45			53			(7	)		61			50			(11	)
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	1,118.5		$	1,250.6		$	1,328.0		$	1,414.9		$	1,994.4					$	999.4		$	1,328.0
Deferral		112.1			118.9			122.7			150.0			157.6						323.0			430.3
Amortization		(26.8	)		(59.5	)		(65.8	)		(72.7	)		(75.6	)					(123.2	)		(214.0	)
Included in Total Operating Expenses		85.2			59.4			56.9			77.3			82.0						199.8			216.3
Adjustment related to realized (gains) losses
on available-for-sale securities		(4.7	)		(3.5	)		(2.7	)		(4.1	)		(2.4	)					(13.6	)		(9.2	)
Adjustment related to unrealized (gains) losses
on available-for-sale securities		51.7			21.5			32.7			57.3			(103.6	)					65.0			(13.6	)
Business acquired		-			-			-			448.9			3.8						-			452.7
Balance at end of period	$	1,250.6		$	1,328.0		$	1,414.9		$	1,994.4		$	1,974.1					$	1,250.6		$	1,974.1
Roll Forward of Deferred Front-End Loads
Balance at beginning of period	$	61.1		$	65.6		$	72.0		$	78.1		$	84.8					$	50.1		$	72.0
Deferral		9.4			9.5			9.4			9.8			10.0						26.3			29.1
Amortization		(4.8	)		(3.1	)		(3.3	)		(3.0	)		(0.1	)					(10.7	)		(6.4	)
Included in Income from Operations		4.6			6.4			6.1			6.8			9.8						15.6			22.7
Adjustment related to realized (gains) losses
on available-for-sale securities		-			-			-			-			(0.1	)					-			(0.1	)
Balance at end of period	$	65.6		$	72.0		$	78.1		$	84.8		$	94.6					$	65.6		$	94.6
Roll Forward of Deferred Sales Inducements
Balance at beginning of period	$	106.6		$	118.1		$	129.4		$	139.9		$	154.6					$	85.5		$	129.4
Deferral		15.1			15.6			15.7			19.9			22.2						43.9			57.8
Amortization		(3.6	)		(4.4	)		(5.2	)		(5.2	)		(3.3	)					(11.3	)		(13.7	)
Included in Income from Operations		11.5			11.3			10.5			14.7			18.9						32.6			44.1
Adjustment related to realized (gains) losses
on available-for-sale securities		-			-			-			-			(0.1	)					-			(0.1	)
Balance at end of period	$	118.1		$	129.4		$	139.9		$	154.6		$	173.4					$	118.1		$	173.4

⁽¹⁾ Primarily broker-dealer revenue.

⁽²⁾ Includes distribution costs.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 18

Individual Markets - Individual Annuities

Account Value Roll Forward

Unaudited [Billions of Dollars]

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2005			2005			2006			2006			2006			Change			2005			2006			Change
Fixed Annuities - Balance at Beginning of Period	$	11.441		$	11.375		$	10.840		$	10.563		$	19.533			70.7	%	$	11.448		$	10.840			-5.3	%
Business acquired		-			-			-			9.343			-			NM			-			9.343			NM
Gross deposits		0.494			0.486			0.471			0.872			1.062			115.0	%		1.501			2.405			60.2	%
Withdrawals & deaths		(0.340	)		(0.370	)		(0.408	)		(1.037	)		(1.405	)		NM			(1.040	)		(2.850	)		NM
Net flows		0.155			0.116			0.063			(0.164	)		(0.344	)		NM			0.461			(0.445	)		NM
Transfer from (to) variable annuities		(0.338	)		(0.766	)		(0.451	)		(0.395	)		(0.483	)		-42.9	%		(0.884	)		(1.330	)		-50.5	%
Interest credited		0.117			0.115			0.112			0.186			0.233			99.1	%		0.350			0.531			51.7	%
Fixed Annuities - Gross		11.375			10.840			10.563			19.533			18.939			66.5	%		11.375			18.939			66.5	%
Reinsurance ceded		(2.257	)		(2.233	)		(2.202	)		(2.149	)		(2.045	)		9.4	%		(2.257	)		(2.045	)		9.4	%
Fixed Annuities - Balance at End of Period (1)	$	9.117		$	8.607		$	8.362		$	17.384		$	16.894			85.3	%	$	9.117		$	16.894			85.3	%
Variable Annuities - Balance at Beginning of Period	$	32.801		$	35.276		$	37.655		$	40.495		$	41.537			26.6	%	$	30.684		$	37.655			22.7	%
Business acquired		-			-			-			0.250			-			NM			-			0.250			NM
Gross deposits		1.410			1.513			1.665			1.867			1.658			17.6	%		4.026			5.191			28.9	%
Withdrawals & deaths		(0.847	)		(0.862	)		(0.959	)		(1.004	)		(1.011	)		-19.4	%		(2.378	)		(2.973	)		-25.0	%
Net flows		0.563			0.651			0.706			0.864			0.648			15.1	%		1.647			2.217			34.6	%
Transfer from (to) fixed annuities		0.418			0.462			0.451			0.395			0.483			15.6	%		1.187			1.330			12.0	%
Investment increase & change in market value		1.494			1.266			1.682			(0.467	)		1.309			-12.4	%		1.758			2.524			43.6	%
Variable Annuities - Balance at End of Period (2)	$	35.276		$	37.655		$	40.495		$	41.537		$	43.977			24.7	%	$	35.276		$	43.977			24.7	%
Total Annuities - Balance at Beginning of Period	$	44.242		$	46.651		$	48.495		$	51.059		$	61.070			38.0	%	$	42.132		$	48.495			15.1	%
Business acquired		-			-			-			9.593			-			NM			-			9.593			NM
Gross deposits		1.904			1.999			2.136			2.740			2.720			42.9	%		5.527			7.596			37.4	%
Withdrawals & deaths		(1.187	)		(1.232	)		(1.366	)		(2.040	)		(2.416	)		NM			(3.418	)		(5.823	)		-70.4	%
Net flows		0.717			0.767			0.770			0.699			0.304			-57.6	%		2.109			1.773			-15.9	%
Transfers		0.080			(0.304	)		-			0.000			0.000			-100.0	%		0.302			0.000			-100.0	%
Interest credited & change in market value		1.611			1.381			1.794			(0.281	)		1.542			-4.3	%		2.108			3.055			44.9	%
Total Annuities - Gross		46.651			48.495			51.059			61.070			62.916			34.9	%		46.651			62.916			34.9	%
Reinsurance ceded		(2.257	)		(2.233	)		(2.202	)		(2.149	)		(2.045	)		9.4	%		(2.257	)		(2.045	)		9.4	%
Total Annuities (Net of Ceded) - Balance at End of Period	$	44.393		$	46.262		$	48.857		$	58.921		$	60.872			37.1	%	$	44.393		$	60.872			37.1	%
Variable Annuities Under Agreement - Included above	$	0.226		$	0.197		$	0.190		$	0.173		$	0.169			-25.2	%	$	0.226		$	0.169			-25.2	%
Incremental Deposits (3):
Fixed annuities	$	0.481		$	0.472		$	0.461		$	0.861		$	1.058			120.0	%	$	1.459		$	2.381			63.2	%
Variable annuities		1.383			1.481			1.650			1.850			1.623			17.4	%		3.934			5.123			30.2	%
Total Incremental Deposits	$	1.864		$	1.953		$	2.111		$	2.711		$	2.681			43.8	%	$	5.393		$	7.504			39.1	%

Note: Certain reclassifications have been made to properly distinguish between fixed and variable products.

⁽¹⁾ Includes fixed portion of variable annuities.

⁽²⁾ Excludes the fixed portion of variable annuities.

⁽³⁾ Incremental Deposits represent gross deposits reduced by transfers from other Lincoln products.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 19

Individual Markets - Individual Annuities

Account Values

Unaudited [Billions of Dollars]

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2005			2005			2006			2006			2006			Change			2005			2006			Change
Fixed Annuities - excluding fixed portion of variable contracts
Deposits	$	0.018		$	0.006		$	0.021		$	0.137		$	0.258			NM		$	0.111		$	0.417			275.7	%
Withdrawals		(0.151	)		(0.183	)		(0.243	)		(0.805	)		(1.148	)		NM			(0.594	)		(2.196	)		NM
Net flows	$	(0.133	)	$	(0.177	)	$	(0.222	)	$	(0.668	)	$	(0.890	)		NM		$	(0.483	)	$	(1.780	)		NM
Gross fixed contract account values	$	7.101		$	6.918		$	6.745		$	12.190		$	11.766			65.7	%	$	7.101		$	11.766			65.7	%
Reinsurance ceded		(2.257	)		(2.233	)		(2.202	)		(2.149	)		(2.045	)		9.4	%		(2.257	)		(2.045	)		9.4	%
Net Fixed Contract Account Values	$	4.844		$	4.685		$	4.543		$	10.041		$	9.721			100.7	%	$	4.844		$	9.721			100.7	%
Indexed Annuities
Deposits	$	-		$	-		$	-		$	0.228		$	0.244			NM		$	-		$	0.472			NM
Withdrawals		-			-			-			(0.047	)		(0.068	)		NM			-			(0.114	)		NM
Net flows	$	-		$	-		$	-		$	0.181		$	0.177			NM		$	-		$	0.358			NM
Equity-indexed Contract Account Values	$	-		$	-		$	-		$	3.210		$	3.454			NM		$	-		$	3.454			NM
Fixed Portion of Variable Contracts
Deposits	$	0.476		$	0.480		$	0.449		$	0.507		$	0.559			17.4	%	$	1.390		$	1.516			9.1	%
Withdrawals		(0.188	)		(0.187	)		(0.164	)		(0.185	)		(0.190	)		-1.1	%		(0.445	)		(0.539	)		-21.1	%
Net flows	$	0.288		$	0.293		$	0.285		$	0.322		$	0.370			28.5	%	$	0.944		$	0.977			3.5	%
Fixed Portion of Variable Contract Account Values	$	4.274		$	3.922		$	3.819		$	4.132		$	3.719			-13.0	%	$	4.274		$	3.719			-13.0	%
Variable Annuities - including fixed portion of variable contracts
Deposits	$	1.886		$	1.993		$	2.114		$	2.374		$	2.218			17.6	%	$	5.416		$	6.707			23.8	%
Withdrawals		(1.035	)		(1.049	)		(1.123	)		(1.188	)		(1.200	)		-15.9	%		(2.824	)		(3.512	)		-24.4	%
Net Flows	$	0.850		$	0.945		$	0.991		$	1.186		$	1.017			19.6	%	$	2.592		$	3.195			23.3	%
Variable Contract Account Values	$	39.550		$	41.577		$	44.314		$	45.669		$	47.697			20.6	%	$	39.550		$	47.697			20.6	%
Average Daily Variable Annuity Account Values	$	34.367		$	36.089		$	39.947		$	41.214		$	42.118			22.6	%	$	32.310		$	41.093			27.2	%
Individual Annuity Product Spread Information																	Change									Change
																	(Basis Point)									(Basis Point)
Net investment income (1) (2)		5.68	%		5.73	%		5.84	%		5.67	%		5.98	%		30			5.71	%		5.76	%		5
Interest credited to policyholders		3.93	%		3.92	%		3.93	%		3.81	%		3.87	%		(6	)		3.93	%		3.86	%		(7	)
Spread (1) (2)		1.75	%		1.81	%		1.91	%		1.86	%		2.11	%		36			1.78	%		1.90	%		12

Note: Certain reclassifications have been made to properly distinguish between fixed and variable products.

⁽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 5 bps in the third quarter of 2006, 2 bps in the second quarter of 2006, 9 bps in the first quarter of 2006, 6 bps in the fourth quarter of 2005 and 1 bp in the third quarter of 2005. The impact was 6 bps in the first nine months of 2006 and 3 bps in the first nine months of 2005.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 20

Employer Markets - Defined Contribution

Income Statements & Operational Data

Unaudited [Millions of Dollars]

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2005			2005			2006			2006			2006			Change			2005			2006			Change
Operating Revenue
Surrender charges	$	2.8		$	2.0		$	2.3		$	2.1		$	1.7			-39.3	%	$	7.9		$	6.1			-22.8	%
Expense assessments		51.8			51.7			55.6			54.7			54.0			4.2	%		148.9			164.3			10.3	%
Net investment income		177.5			181.3			185.7			187.5			184.6			4.0	%		530.2			557.8			5.2	%
Other revenue and fees		6.6			6.2			5.6			4.6			4.9			-25.8	%		19.3			15.1			-21.8	%
Total Operating Revenue		238.7			241.2			249.2			248.9			245.1			2.7	%		706.3			743.2			5.2	%
Operating Expenses
Interest credited to contractholder funds		100.7			101.1			100.7			102.4			103.1			2.4	%		300.7			306.2			1.8	%
Operating and acquisition expenses		62.2			77.2			73.3			69.5			74.5			19.8	%		207.3			217.3			4.8	%
Total Operating Expenses		162.9			178.3			174.0			171.9			177.6			9.0	%		508.0			523.5			3.1	%
Income from operations before Federal income taxes		75.8			62.9			75.2			77.0			67.5			-10.9	%		198.3			219.7			10.8	%
Federal income taxes		22.4			17.7			22.7			22.7			15.0			-33.0	%		56.4			60.4			7.1	%
Income from Operations	$	53.4		$	45.2		$	52.5		$	54.3		$	52.5			-1.7	%	$	141.9		$	159.3			12.3	%
Effective tax rate		29.5	%		28.2	%		30.2	%		29.4	%		22.3	%					28.4	%		27.5	%
Average equity	$	909.9		$	939.1		$	1,006.4		$	985.3		$	945.7					$	894.3		$	979.1
Return on average equity		23.5	%		19.3	%		20.9	%		22.0	%		22.2	%					21.2	%		21.7	%
Basis points on average account values		73			60			67			69			66						66			67
Operating and Acquisition Expenses
Commissions	$	26.4		$	25.1		$	26.2		$	22.2		$	23.4			-11.4	%	$	77.8		$	71.8			-7.7	%
General and administrative expenses		60.6			57.4			49.7			47.2			56.4			-6.9	%		158.2			153.3			-3.1	%
Taxes, licenses and fees		(0.8	)		1.2			2.9			2.8			1.3			NM			6.5			7.1			9.2	%
Total commissions and expenses incurred		86.2			83.7			78.8			72.3			81.1			-5.9	%		242.5			232.2			-4.2	%
Less: commissions and expenses capitalized		(24.5	)		(24.4	)		(25.5	)		(22.6	)		(21.5	)		12.2	%		(72.9	)		(69.6	)		4.5	%
Amortization of DAC and VOBA		0.5			17.9			20.0			19.8			14.9			NM			37.7			54.7			45.1	%
Net Operating and Acquisition Expenses	$	62.2		$	77.2		$	73.3		$	69.5		$	74.5			19.8	%	$	207.3		$	217.3			4.8	%
General and administrative expenses - basis
points on account values - Annualized (1)		83			77			64			60			71			(11	)		74			65			(9	)
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	332.0		$	420.1		$	454.9		$	517.2		$	564.0					$	304.1		$	454.9
Deferral		24.5			24.4			25.5			22.6			21.5						72.9			69.6
Amortization		(0.5	)		(17.9	)		(20.0	)		(19.8	)		(14.9	)					(37.7	)		(54.8	)
Included in Total Operating Expenses		24.1			6.6			5.5			2.7			6.6						35.2			14.8
Adjustment related to realized (gains) losses
on available-for-sale securities		(3.7	)		(3.9	)		(4.4	)		(6.1	)		(2.0	)					(12.9	)		(12.6	)
Adjustment related to unrealized (gains) losses
on available-for-sale securities		67.7			32.1			61.2			50.2			(64.8	)					93.7			46.7
Business acquired		-			-			-			-			-						-			-
Other		-			-			-			-			-						-			-
Balance at end of period	$	420.1		$	454.9		$	517.2		$	564.0		$	503.8					$	420.1		$	503.8

⁽¹⁾ Includes distribution costs.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 21

Employer Markets - Defined Contribution

Account Value Roll Forward

Unaudited [Billions of Dollars]

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2005			2005			2006			2006			2006			Change			2005			2006			Change
Fixed Annuities - Balance at Beginning of Period	$	10.710		$	10.686		$	11.009		$	11.033		$	11.050			3.2	%	$	10.837		$	11.009			1.6	%
Gross deposits (1)		0.259			0.240			0.253			0.242			0.268			3.5	%		0.843			0.763			-9.6	%
Withdrawals & deaths		(0.330	)		(0.342	)		(0.328	)		(0.345	)		(0.426	)		-29.1	%		(1.120	)		(1.100	)		1.9	%
Net flows		(0.071	)		(0.103	)		(0.075	)		(0.103	)		(0.159	)		NM			(0.277	)		(0.337	)		-21.6	%
Transfer from (to) variable annuities		(0.055	)		0.318			0.014			0.030			0.049			NM			(0.174	)		0.093			NM
Interest credited		0.102			0.108			0.085			0.090			0.121			18.6	%		0.300			0.296			NM
Fixed Annuities - Balance at End of Period (2)	$	10.686		$	11.009		$	11.033		$	11.050		$	11.061			3.5	%	$	10.686		$	11.061			3.5	%
Variable Annuities - Balance at Beginning of Period	$	14.648		$	15.293		$	15.692		$	16.454		$	16.144			10.2	%	$	14.576		$	15.692			7.7	%
Gross deposits (1)		0.553			0.616			0.669			0.714			0.583			5.4	%		1.638			1.966			20.1	%
Withdrawals & deaths		(0.548	)		(0.553	)		(0.676	)		(0.647	)		(0.565	)		-3.1	%		(1.557	)		(1.888	)		-21.2	%
Net flows		0.005			0.062			(0.006	)		0.067			0.018			260.0	%		0.081			0.079			-2.9	%
Transfer from (to) fixed annuities		(0.025	)		(0.011	)		(0.015	)		(0.032	)		(0.046	)		-84.0	%		(0.121	)		(0.093	)		23.2	%
Investment increase & change in market value		0.665			0.348			0.783			(0.345	)		0.414			-37.7	%		0.757			0.852			12.6	%
Variable Annuities - Balance at End of Period (3)	$	15.293		$	15.692		$	16.454		$	16.144		$	16.530			8.1	%	$	15.293		$	16.530			8.1	%
Total Annuities - Balance at Beginning of Period	$	25.358		$	25.979		$	26.701		$	27.487		$	27.194			7.2	%	$	25.413		$	26.701			5.1	%
Gross Deposits (1)		0.812			0.856			0.923			0.955			0.851			4.8	%		2.481			2.729			10.0	%
Withdrawals & deaths		(0.878	)		(0.896	)		(1.004	)		(0.992	)		(0.992	)		-13.0	%		(2.677	)		(2.987	)		-11.6	%
Net flows		(0.066	)		(0.040	)		(0.081	)		(0.036	)		(0.141	)		NM			(0.196	)		(0.258	)		-31.7	%
Transfers		(0.080	)		0.306			(0.001	)		(0.002	)		0.003			NM			(0.295	)		0.001			NM
Interest credited & change in market value		0.766			0.456			0.867			(0.255	)		0.535			-30.2	%		1.057			1.147			8.6	%
Total Annuities - Balance at End of Period	$	25.979		$	26.701		$	27.487		$	27.194		$	27.591			6.2	%	$	25.979		$	27.591			6.2	%
Alliance Mutual Funds - Balance at Beginning of Period	$	3.432		$	3.672		$	3.772		$	4.248		$	4.330			26.2	%	$	2.861		$	3.772			31.8	%
Plan/Participant Rollovers		0.036			0.063			0.125			0.021			0.021			-41.7	%		0.359			0.167			-53.6	%
Additional contributions		0.164			0.160			0.193			0.183			0.214			30.5	%		0.484			0.590			21.9	%
Gross deposits		0.200			0.223			0.318			0.204			0.235			17.5	%		0.843			0.757			-10.3	%
Withdrawals & deaths		(0.107	)		(0.208	)		(0.056	)		(0.054	)		(0.057	)		46.7	%		(0.202	)		(0.167	)		17.1	%
Net flows		0.093			0.014			0.262			0.150			0.178			91.4	%		0.641			0.589			-8.1	%
Transfers		(0.000	)		(0.003	)		0.005			-			(0.015	)		NM			(0.004	)		(0.009	)		NM
Interest credited & change in market value		0.147			0.088			0.209			(0.068	)		0.143			-2.7	%		0.174			0.284			63.1	%
Total Alliance Mutual Funds - Balance at End of Period (4)	$	3.672		$	3.772		$	4.248		$	4.330		$	4.636			26.3	%	$	3.672		$	4.636			26.2	%
Total Retirement Products Segment Account Values-
including Alliance Mutual Funds
Balance at Beginning of Period	$	28.790		$	29.651		$	30.473		$	31.735		$	31.524			9.5	%	$	28.274		$	30.473			7.8	%
Gross deposits (1)		1.012			1.078			1.241			1.159			1.086			7.3	%		3.324			3.486			4.9	%
Withdrawals & deaths		(0.984	)		(1.104	)		(1.060	)		(1.045	)		(1.049	)		-6.6	%		(2.879	)		(3.155	)		-9.6	%
Net flows		0.028			(0.026	)		0.181			0.114			0.037			32.1	%		0.445			0.331			-25.6	%
Transfers		(0.080	)		0.304			0.005			(0.002	)		(0.012	)		85.0	%		(0.299	)		(0.009	)		NM
Interest credited & change in market value		0.914			0.544			1.077			(0.322	)		0.677			-25.9	%		1.231			1.431			16.3	%
Total Retirement Products Segment Account Values-
Balance at End of Period	$	29.651		$	30.473		$	31.735		$	31.524		$	32.227			8.7	%	$	29.651		$	32.227			8.7	%
Variable Annuities Under Agreement - Included above		0.019			0.019			0.018			0.017			0.017			-10.5	%		0.019			0.017			-10.5	%
Incremental Deposits (5) :
Fixed Annuities	$	0.243		$	0.200		$	0.254		$	0.226		$	0.253			4.1	%	$	0.821		$	0.733			-10.7	%
Variable Annuities		0.553			0.614			0.654			0.709			0.576			4.2	%		1.631			1.939			18.9	%
Total Annuities Incremental Deposits		0.796			0.814			0.908			0.935			0.829			4.1	%		2.452			2.672			9.0	%
Total Alliance Mutual Funds Incremental Deposits		0.200			0.223			0.318			0.204			0.235			17.5	%		0.843			0.757			-10.2	%
Total Retirement Products Incremental Deposits	$	0.996		$	1.036		$	1.226		$	1.139		$	1.064			6.8	%	$	3.295		$	3.429			4.1	%

Note: Certain reclassifications have been made to properly distinguish between fixed and variable products.

⁽¹⁾ Gross deposits for the second quarter and first nine months of 2006 include approximately $20 million and $110 million of fixed and variable annuity deposits, respectively, resulting from JP employee plan deposits into the LNC employee plan as a result of the merger.

⁽²⁾ Includes Fixed Annuity products offered under the Alliance mutual funds and the fixed portion of variable annuities.

⁽³⁾ Excludes the fixed portion of variable annuities.

⁽⁴⁾ Represents amounts attributable to Alliance mutual fund net flows. Alliance mutual fund account values are not included in the separate accounts reported on our balance sheet.

⁽⁵⁾ Incremental Deposits represent gross deposits reduced by transfers from other Lincoln products.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 22

Employer Markets - Defined Contribution

Supplemental Data

Unaudited [Billions of Dollars]

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2005			2005			2006			2006			2006			Change			2005			2006			Change
Fixed Annuities - excluding fixed portion of variable contracts
Deposits (1)	$	0.126		$	0.152		$	0.135		$	0.121		$	0.157			24.6	%	$	0.412		$	0.413			0.2	%
Withdrawals		(0.175	)		(0.190	)		(0.108	)		(0.114	)		(0.162	)		7.4	%		(0.489	)		(0.383	)		21.7	%
Net Flows	$	(0.048	)	$	(0.039	)	$	0.027		$	0.008		$	(0.005	)		89.6	%	$	(0.077	)	$	0.030			NM
Fixed Contract Account Values	$	4.758		$	4.654		$	4.690		$	4.717		$	4.758			-		$	4.758		$	4.758			-
Fixed Portion of Variable Contracts
Deposits	$	0.133		$	0.088		$	0.118		$	0.120		$	0.111			-16.5	%	$	0.432		$	0.350			-19.0	%
Withdrawals		(0.155	)		(0.152	)		(0.220	)		(0.231	)		(0.265	)		-71.0	%		(0.632	)		(0.716	)		-13.3	%
Net Flows	$	(0.022	)	$	(0.064	)	$	(0.102	)	$	(0.111	)	$	(0.154	)		NM		$	(0.200	)	$	(0.366	)		-83.0	%
Fixed Portion of Variable Contract Account Values	$	5.928		$	6.355		$	6.343		$	6.333		$	6.303			6.3	%	$	5.928		$	6.303			6.3	%
Variable Annuities - including fixed portion of variable contracts
Deposits (1)	$	0.685		$	0.704		$	0.788		$	0.834		$	0.694			1.3	%	$	2.070		$	2.316			11.9	%
Withdrawals		(0.703	)		(0.705	)		(0.896	)		(0.878	)		(0.830	)		-18.1	%		(2.189	)		(2.604	)		-19.0	%
Net Flows	$	(0.017	)	$	(0.002	)	$	(0.108	)	$	(0.044	)	$	(0.136	)		NM		$	(0.119	)	$	(0.288	)		NM
Variable Contract Account Values	$	21.221		$	22.047		$	22.797		$	22.477		$	22.833			7.6	%	$	21.221		$	22.833			7.6	%
Average Daily Variable Annuity Account Values	$	15.087		$	15.323		$	16.177		$	16.270		$	16.116			6.8	%	$	14.601		$	16.188			10.9	%
Total Annuity based Retirement Plan Product Spread Information (2)																	Change									Change
																	(Basis Point)									(Basis Point)
Net investment income (3)		6.25	%		6.36	%		6.34	%		6.31	%		6.36	%		11			6.26	%		6.34	%		8
Interest credited to policyholders		3.67	%		3.67	%		3.66	%		3.73	%		3.74	%		7			3.68	%		3.71	%		3
Spread (3)		2.58	%		2.69	%		2.68	%		2.58	%		2.62	%		4			2.58	%		2.63	%		5

Note: Certain reclassifications have been made to properly distinguish between fixed and variable products.

⁽¹⁾ Gross deposits for the second quarter and first nine months of 2006 include approximately $20 million and $110 million of fixed and variable annuity deposits, respectively, resulting from JP employee plan deposits into the LNC employee plan as a result of the merger.

⁽²⁾ 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.

⁽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 was 14 bps in the 3rd quarter of 2006, 12 bps in the 2nd quarter of 2006, 15 bps in the 1st quarter of 2006, 17 bps in the 4th quarter of 2005 and 7 bps in the 3rd quarter of 2005.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 23

Employer Markets - Executive Benefits

Income Statements & Operational Data

Unaudited [Millions of Dollars]

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2005			2005			2006			2006			2006			Change			2005			2006			Change
Operating Revenue
Premiums	$	7.4		$	0.7		$	1.1		$	0.0		$	0.3			-95.9	%	$	7.9		$	1.4			-82.3	%
Surrender charges		(0.1	)		0.0			0.0			0.0			0.0			NM			(0.4	)		0.0			NM
Mortality assessments		2.0			2.5			2.8			8.5			7.2			260.0	%		6.3			18.5			193.7	%
Expense assessments		3.7			6.1			3.3			4.9			4.5			21.6	%		12.5			12.6			0.8	%
Net investment income		45.1			51.0			48.7			86.5			91.0			101.8	%		135.7			226.1			66.6	%
Other revenue and fees		1.3			1.3			1.4			1.3			1.3						3.8			4.0			5.3	%
Total Operating Revenue		59.4			61.6			57.2			101.2			104.3			75.6	%		165.8			262.7			58.4	%
Operating Expenses
Insurance benefits		39.9			31.2			32.8			30.4			35.6			-10.8	%		102.5			98.8			-3.6	%
Interest credited to contractholder funds		10.4			9.5			9.3			40.2			39.9			283.7	%		29.4			89.4			204.1	%
Operating and acquisition expenses		6.4			7.3			4.6			7.2			11.7			82.8	%		21.9			23.4			6.8	%
Total Operating Expenses		56.8			48.0			46.7			77.7			87.2			53.5	%		153.7			211.5			37.6	%
Income from operations before Federal income taxes		2.7			13.6			10.5			23.5			17.1			NM			12.1			51.1			NM
Federal income taxes		0.2			4.1			3.0			7.3			4.3			NM			2.0			14.6			NM
Income from Operations	$	2.5		$	9.5		$	7.5		$	16.2		$	12.8			NM		$	10.1		$	36.5			261.4	%
Effective tax rate		7.6	%		30.0	%		28.5	%		31.0	%		25.2	%					16.3	%		28.5	%
Average equity	$	283.1		$	321.8		$	334.5		$	524.8		$	519.8					$	289.6		$	459.7
Return on average equity		3.5	%		11.8	%		9.0	%		12.4	%		9.8	%					4.7	%		10.6	%
Operating and Acquisition Expenses
Commissions	$	6.7		$	5.1		$	5.1		$	8.1		$	7.1			6.0	%	$	16.9		$	20.3			20.1	%
General and administrative expenses		5.8			5.0			3.7			2.8			6.2			6.9	%		14.0			12.6			-10.0	%
Taxes, licenses and fees		1.5			1.0			1.1			1.3			1.4			-6.7	%		3.4			3.7			8.8	%
Total commissions and expenses incurred		14.0			11.1			9.9			12.2			14.6			4.3	%		34.3			36.7			7.0	%
Less: commissions and expenses capitalized		(7.3	)		(5.1	)		(5.7	)		(8.0	)		(6.7	)		8.2	%		(18.0	)		(20.4	)		-13.3	%
Amortization of DAC and VOBA		(0.3	)		1.3			0.3			2.9			3.8			NM			5.6			7.0			25.0	%
Net Operating and Acquisition Expenses	$	6.4		$	7.3		$	4.5		$	7.2		$	11.7			82.8	%	$	21.9		$	23.3			6.4	%
General and administrative expenses - basis
points on account values - Annualized (1)		189			155			109			26			58			(131	)		156			52			(104	)
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	102.2		$	109.8		$	113.6		$	119.0		$	274.1					$	97.3		$	113.6
Deferral		7.3			5.1			5.7			8.0			6.7						18.0			20.4
Amortization		0.3			(1.3	)		(0.3	)		(2.9	)		(3.8	)					(5.6	)		(7.0	)
Included in Total Operating Expenses		7.6			3.8			5.4			5.1			2.9						12.5			13.4
Adjustment related to realized (gains) losses
on available-for-sale securities		-			-			-			-			(0.7	)					-			(0.7	)
Adjustment related to unrealized (gains)
losses on available-for-sale securities		-			-			-			7.6			(18.3	)					0.0			(10.8	)
Business acquired		-			-			-			142.5			-						-			142.5
Other		(0.0	)		(0.0	)		0.0			-			-						(0.0	)		0.0
Balance at end of period	$	109.8		$	113.6		$	119.0		$	274.1		$	258.0					$	109.8		$	258.0
Roll Forward of Deferred Front-End Loads
Balance at beginning of period	$	15.6		$	16.9		$	17.9		$	18.9		$	19.7					$	15.5		$	17.9
Deferral		1.0			1.2			1.0			1.0			0.9						2.7			2.9
Amortization		0.4			(0.3	)		(0.0	)		(0.2	)		(0.3	)					(1.3	)		(0.5	)
Included in Income from Operations		1.3			0.9			1.0			0.8			0.6						1.4			2.4
Balance at end of period	$	16.9		$	17.9		$	18.9		$	19.7		$	20.3					$	16.9		$	20.3

⁽¹⁾ Includes distribution costs.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 24

Employer Markets - Executive Benefits

Account Value Roll Forward and Supplemental Data

Unaudited [Billions of Dollars]

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2005			2005			2006			2006			2006			Change			2005			2006			Change
COLI/BOLI- Balance Beginning-of-Period	$ 1.194			$ 1.256			$ 1.318			$ 1.387			$ 4.228			254.1%			$ 1.122			$ 1.318			17.5%
Business acquired		-			-			-			2.795			-			NM			-			2.795			NM
Deposits		0.057			0.052			0.047			0.077			0.058			1.8	%		0.158			0.182			15.2	%
Withdrawals & deaths		(0.015	)		(0.002	)		(0.007	)		(0.042	)		(0.069	)		NM			(0.046	)		(0.118	)		NM
Net flows		0.042			0.049			0.039			0.035			(0.011	)		NM			0.112			0.064			-42.9	%
Policyholder assessments		(0.008	)		(0.011	)		(0.009	)		(0.017	)		(0.016	)		-100.0	%		(0.025	)		(0.041	)		-64.0	%
Interest credited and change in market value		0.028			0.023			0.038			0.028			0.051			82.1	%		0.046			0.117			154.3	%
COLI/BOLI-Balance End-of-Period	$	1.256		$	1.318		$	1.387		$	4.228		$	4.252			238.5	%	$	1.256		$	4.252			238.5	%
COLI/BOLI In-Force	$	7.506		$	7.729		$	7.979		$	15.373		$	15.342			104.4	%	$	7.506		$	15.342			104.4	%
Run Off Institutional Pensions Account Values -
Balance at End of Period	$	2.877		$	2.737		$	2.753		$	2.707		$	2.711			-5.8	%	$	2.877		$	2.711			-5.8	%

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 25

Employer Markets - Group Protection

Income Statements & Operational Data

Unaudited [Millions of Dollars]

	Three Months Ended														Nine Months Ended
	Sept.		Dec.		March		June			Sept.			%		Sept.		Sept.			%
	2005		2005		2006		2006			2006			Change		2005		2006			Change
Operating Revenue
Premiums	$	-	$	-	$	-	$	328.9		$	304.1			NM	$	-	$	633.1			NM
Net investment income		-		-		-		25.1			27.1			NM		-		52.2			NM
Other revenue and fees		-		-		-		0.8			0.9			NM		-		1.7			NM
Total Operating Revenue		-		-		-		354.9			332.1			NM		-		687.0			NM
Operating Expenses
Insurance benefits		-		-		-		226.0			213.3			NM		-		439.3			NM
Operating and acquisition expenses		-		-		-		72.0			74.6			NM		-		146.6			NM
Total Operating Expenses		-		-		-		297.9			287.9			NM		-		585.9			NM
Income from operations before Federal income taxes		-		-		-		56.9			44.2			NM		-		101.2			NM
Federal income taxes		-		-		-		19.9			15.5			NM		-		35.4			NM
Income from Operations	$	-	$	-	$	-	$	37.0		$	28.8			NM	$	-	$	65.8			NM
Effective tax rate								35.0	%		35.0	%						35.0	%
Average equity							$	861.0		$	896.8						$	878.9
Return on average equity								17.2	%		12.8	%						15.0	%
Operating and Acquisition Expenses
Commissions	$	-	$	-	$	-	$	37.3		$	36.0			NM	$	-	$	73.3			NM
General and administrative expenses		-		-		-		31.9			35.5			NM		-		67.4			NM
Taxes, licenses and fees		-		-		-		8.0			7.8			NM		-		15.8			NM
Total commissions and expenses incurred		-		-		-		77.1			79.3			NM		-		156.4			NM
Less commissions and expenses capitalized		-		-		-		(11.2	)		(11.3	)		NM		-		(22.5	)		NM
Amortization of DAC and VOBA		-		-		-		6.0			6.6			NM		-		12.6			NM
Net Operating and Acquisition Expenses	$	-	$	-	$	-	$	72.0		$	74.6			NM	$	-	$	146.6			NM
General and administrative expenses as a
percentage of premiums		-		-		-		9.7	%		11.7	%		NM		-		10.6	%		NM
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	-	$	-	$	-	$	-		$	121.4				$	-	$	-
Deferral		-		-		-		11.2			11.3					-		22.5
Amortization		-		-		-		(6.0	)		(6.6	)				-		(12.6	)
Included in Total Operating Expenses		-		-		-		5.2			4.7					-		9.9
Adjustment related to realized (gains) losses
on available-for-sale securities		-		-		-		-			-					-		-
Adjustment related to unrealized (gains) losses
on available-for-sale securities		-		-		-		-			-					-		-
Business acquired		-		-		-		116.2			-					-		116.2
Other		-		-		-		-			-					-		-
Balance at end of period	$	-	$	-	$	-	$	121.4		$	126.1				$	-	$	126.1

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 26

Employer Markets - Group Protection

Supplemental Data

Unaudited [Millions of Dollars]

	Three Months Ended														Nine Months Ended
	Sept.		Dec.		March		June			Sept.			%		Sept.		Sept.			%
	2005		2005		2006		2006			2006			Change		2005		2006			Change
Annualized Sales
Life	$	-	$	-	$	-	$	15.3		$	19.4			NM	$	-	$	34.7			NM
Disability		-		-		-		22.9			24.7			NM		-		47.6			NM
Dental		-		-		-		7.1			6.1			NM		-		13.2			NM
Premiums:
Life	$	-	$	-	$	-	$	111.6		$	109.9			NM	$	-	$	221.5			NM
Disability		-		-		-		134.0			134.8			NM		-		268.8			NM
Dental		-		-		-		31.4			31.7			NM		-		63.1			NM
Other		-		-		-		51.9			27.8			NM		-		79.7			NM
Total	$	-	$	-	$	-	$	328.9		$	304.1			NM	$	-	$	633.0			NM
Product Line Results:
Life	$	-	$	-	$	-	$	13.5		$	9.8			NM	$	-	$	23.3			NM
Disability		-		-		-		21.1			16.1			NM		-		37.2			NM
Dental		-		-		-		1.4			2.2			NM		-		3.6			NM
Other		-		-		-		1.0			0.7			NM		-		1.7			NM
Total	$	-	$	-	$	-	$	37.0		$	28.8			NM	$	-	$	65.8			NM
Loss Ratios:
Life		-		-		-		67.8	%		72.3	%		NM		-		70.1	%		NM
Disability		-		-		-		59.4	%		64.5	%		NM		-		61.9	%		NM
Dental		-		-		-		76.3	%		71.7	%		NM		-		73.9	%		NM
Combined loss ratios		-		-		-		64.7	%		68.4	%		NM		-		66.6	%		NM

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 27

Investment Management

Income Statements

Unaudited [Millions of Dollars]

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2005			2005			2006			2006			2006			Change			2005			2006			Change
Operating Revenue
Investment advisory fees - External	$	67.9		$	70.9		$	77.8		$	81.2		$	82.4			21.4	%	$	184.9		$	241.4			30.6	%
Investment advisory fees - Insurance-related		24.9			24.5			25.1			23.5			23.7			-4.8	%		74.3			72.3			-2.7	%
Other revenue and fees		30.4			32.5			36.7			30.0			34.3			12.8	%		88.1			101.0			14.6	%
Operating Revenue		123.2			127.9			139.6			134.7			140.4			14.0	%		347.4			414.6			19.3	%
Operating Expenses
Operating and administrative expenses		115.0			114.4			116.1			116.4			120.3			4.6	%		334.6			352.7			5.4	%
Total Operating Expenses		115.0			114.4			116.1			116.4			120.3			4.6	%		334.6			352.7			5.4	%
Income (Loss) from operations before Federal income taxes		8.2			13.5			23.5			18.3			20.1			145.1	%		12.8			61.9			NM
Federal income taxes		3.4			4.6			8.2			6.3			6.7			97.1	%		4.9			21.2			NM
Income (Loss) from Operations	$	4.8		$	8.9		$	15.3		$	12.0		$	13.4			179.2	%	$	7.9		$	40.8			NM
Effective tax rate		41.5	%		34.1	%		34.9	%		34.4	%		33.1	%					38.3	%		34.2	%
Operating and Acquisition Expenses
General and administrative expenses	$	99.0		$	97.8		$	96.1		$	99.4		$	104.2			5.3	%	$	287.1		$	299.7			4.4	%
Depreciation and amortization		1.7			2.0			2.2			2.4			2.2			29.4	%		6.7			6.8			1.5	%
Sub-advisory fees		9.8			10.1			11.0			10.6			9.8						27.1			31.4			15.9	%
Total general and administrative expenses		110.5			109.9			109.3			112.4			116.2			5.2	%		321.0			337.9			5.3	%
Taxes, licenses and fees		2.5			2.6			4.8			2.4			2.7			8.0	%		7.8			9.9			26.9	%
Amortization of intangibles		2.0			2.0			2.0			1.6			1.4			-30.0	%		5.8			5.0			-13.8	%
Total expenses incurred	$	115.0		$	114.4		$	116.1		$	116.4		$	120.3			4.6	%	$	334.6		$	352.7			5.4	%
General and administrative expenses -
basis points on assets under
management - Annualized (1)		35			33			31			28			27			(8	)		36			29			(7	)

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 28

Investment Management

Assets Under Management Roll Forward

Unaudited [Billions of Dollars]

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2005			2005			2006			2006			2006			Change			2005			2006			Change
Retail Fixed - Balance-Beginning-of-Period	$	9.095		$	9.371		$	9.625		$	9.761		$	10.007			10.0	%	$	8.457		$	9.625			13.8	%
Sales (1)		0.942			0.965			0.951			1.034			0.981			4.1	%		2.753			2.965			7.7	%
Redemptions		(0.664	)		(0.779	)		(0.805	)		(0.824	)		(0.810	)		-22.0	%		(1.985	)		(2.440	)		-22.9	%
Transfers		0.023			0.026			(0.056	)		0.030			0.012			-47.8	%		(0.015	)		(0.014	)		6.7	%
Net Flows		0.301			0.212			0.089			0.240			0.183			-39.2	%		0.753			0.512			-32.0	%
Net investment gains and change in market value		(0.025	)		0.043			0.046			0.007			0.332			NM			0.160			0.384			140.0	%
Balance at End-of-Period	$	9.371		$	9.625		$	9.761		$	10.007		$	10.522			12.3	%	$	9.371		$	10.522			12.3	%
Retail Equity - Balance-Beginning-of-Period	$	27.725		$	30.988		$	32.732		$	36.500		$	36.035			30.0	%	$	24.278		$	32.732			34.8	%
Sales (1)		2.630			2.664			3.069			2.249			1.516			-42.4	%		8.719			6.834			-21.6	%
Redemptions		(1.186	)		(1.700	)		(1.840	)		(2.134	)		(1.984	)		-67.3	%		(4.007	)		(5.958	)		-48.7	%
Transfers		(0.025	)		(0.027	)		(0.013	)		(0.032	)		(0.016	)		36.0	%		(0.171	)		(0.061	)		64.3	%
Net Flows		1.419			0.936			1.216			0.082			(0.483	)		NM			4.541			0.815			-82.1	%
Net investment gains and change in market value		1.844			0.807			2.552			(0.547	)		1.402			-24.0	%		2.170			3.408			57.1	%
Balance at End-of-Period	$	30.988		$	32.732		$	36.500		$	36.035		$	36.954			19.3	%	$	30.988		$	36.954			19.3	%
Total Retail - Balance-Beginning-of-Period	$	36.820		$	40.359		$	42.357		$	46.261		$	46.042			25.0	%	$	32.735		$	42.357			29.4	%
Retail sales-Annuities		0.642			0.713			0.885			0.869			0.960			49.5	%		2.056			2.715			32.1	%
Retail sales-Mutual Funds		1.331			1.657			1.329			1.370			1.151			-13.5	%		4.338			3.849			-11.3	%
Retail sales-Managed Accounts & Other		1.599			1.260			1.806			1.043			0.386			-75.9	%		5.079			3.235			-36.3	%
Total Retail Sales		3.572			3.629			4.019			3.282			2.497			-30.1	%		11.472			9.799			-14.6	%
Redemptions		(1.850	)		(2.479	)		(2.645	)		(2.959	)		(2.794	)		-51.0	%		(5.993	)		(8.398	)		-40.1	%
Transfers		(0.002	)		(0.002	)		(0.069	)		(0.002	)		(0.003	)		-50.0	%		(0.186	)		(0.074	)		60.2	%
Net Flows		1.720			1.148			1.305			0.322			(0.300	)		NM			5.294			1.327			-74.9	%
Net investment gains and change in market value		1.819			0.850			2.598			(0.540	)		1.733			-4.7	%		2.330			3.792			62.7	%
Balance at End-of-Period	$	40.359		$	42.357		$	46.261		$	46.042		$	47.476			17.6	%	$	40.359		$	47.476			17.6	%
Institutional Fixed - Balance-Beginning-of-Period	$	13.403		$	13.964		$	14.699		$	17.262		$	18.154			35.4	%	$	11.547		$	14.699			27.3	%
Inflows (1)		1.036			1.175			3.080			1.634			1.133			9.4	%		4.038			5.847			44.8	%
Withdrawals/terminations		(0.393	)		(0.483	)		(0.447	)		(0.750	)		(0.516	)		-31.3	%		(1.726	)		(1.713	)		0.8	%
Transfers		0.001			(0.001	)		0.002			0.008			(0.002	)		NM			(0.005	)		0.009			NM
Net Flows		0.643			0.691			2.636			0.892			0.615			-4.4	%		2.307			4.143			79.6	%
Net investment gains and change in market value		(0.083	)		0.044			(0.074	)		0.001			0.618			NM			0.109			0.545			NM
Balance at End-of-Period	$	13.964		$	14.699		$	17.262		$	18.154		$	19.387			38.8	%	$	13.964		$	19.387			38.8	%
Institutional Equity - Balance-Beginning-of-Period	$	16.627		$	18.951		$	20.576		$	22.906		$	21.729			30.7	%	$	12.849		$	20.576			60.1	%
Inflows (1)		2.131			3.658			1.964			1.130			1.274			-40.2	%		7.431			4.367			-41.2	%
Withdrawals/terminations		(0.948	)		(2.617	)		(1.008	)		(1.327	)		(0.844	)		11.0	%		(2.550	)		(3.179	)		-24.7	%
Transfers		(0.000	)		0.001			0.000			(0.008	)		0.001			NM			(0.143	)		(0.007	)		95.1	%
Net Flows		1.182			1.041			0.956			(0.205	)		0.431			-63.5	%		4.738			1.182			-75.1	%
Net investment gains and change in market value		1.141			0.584			1.373			(0.971	)		0.489			-57.1	%		1.364			0.890			-34.8	%
Balance at End-of-Period	$	18.951		$	20.576		$	22.906		$	21.729		$	22.649			19.5	%	$	18.951		$	22.649			19.5	%
Total Institutional - Balance-Beginning-of-Period	$	30.031		$	32.915		$	35.276		$	40.167		$	39.883			32.8	%	$	24.396		$	35.276			44.6	%
Inflows		3.166			4.833			5.044			2.764			2.406			-24.0	%		11.469			10.214			-10.9	%
Withdrawals/terminations		(1.342	)		(3.100	)		(1.454	)		(2.078	)		(1.360	)		-1.3	%		(4.276	)		(4.892	)		-14.4	%
Transfers		0.000			(0.001	)		0.003			0.000			(0.000	)		NM			(0.148	)		0.002			NM
Net Flows		1.825			1.733			3.592			0.687			1.046			-42.7	%		7.045			5.324			-24.4	%
Net investment gains and change in market value		1.058			0.629			1.299			(0.971	)		1.107			4.6	%		1.473			1.435			-2.6	%
Balance at End-of-Period	$	32.915		$	35.276		$	40.167		$	39.883		$	42.035			27.7	%	$	32.915		$	42.035			27.7	%
Total Retail and Institutional - At End-of-Period	$	73.274		$	77.633		$	86.428		$	85.926		$	89.511			22.2	%	$	73.274		$	89.511			22.2	%
General Account Assets-End-of-Period (2)	$	43.095		$	43.086		$	41.995		$	65.637		$	67.410			56.4	%	$	43.095		$	67.410			56.4	%
Total Assets Under Management
At End-of-Period	$	116.369		$	120.719		$	128.423		$	151.563		$	156.921			34.8	%	$	116.369		$	156.921			34.8	%
Total Retail and Institutional - Net Flows	$	3.546		$	2.881		$	4.898		$	1.008		$	0.745			-79.0	%	$	12.339		$	6.651			-46.1	%
Subadvised Assets, included in Assets
Under Management above
Retail	$	14.319		$	15.388		$	17.320		$	16.899		$	16.421			14.7	%	$	14.319		$	16.421			14.7	%
Institutional		4.986			5.114			5.608			4.593			4.560			-8.5	%		4.986			4.560			-8.5	%
Total Subadvised Assets	$	19.305		$	20.503		$	22.928		$	21.491		$	20.982			8.7	%	$	19.305		$	20.982			8.7	%

⁽¹⁾ Sales and in-flows include dividend reinvestments.

⁽²⁾ Balance at June 30, 2006 includes $26.1 billion of assets acquired due to the merger with Jefferson Pilot.

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 29

Lincoln UK

Income Statements

Unaudited [Millions of Dollars]

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2005			2005			2006			2006			2006			Change			2005			2006			Change
Operating Revenue
Premiums	$	16.9		$	15.4		$	16.6		$	19.9		$	21.1			24.9	%	$	47.9		$	57.6			20.3	%
Mortality assessments		9.0			7.3			7.8			8.9			8.7			-3.3	%		27.4			25.4			-7.3	%
Expense assessments		56.0			22.0			28.0			34.7			23.9			-57.3	%		119.6			86.7			-27.5	%
Net investment income		20.9			17.8			17.0			17.8			18.6			-11.0	%		60.8			53.4			-12.2	%
Other revenue and fees		-			-			0.1			-			-			NM			0.1			0.1
Total Operating Revenue		102.9			62.6			69.5			81.4			72.3			-29.7	%		255.8			223.2			-12.7	%
Operating Expenses
Insurance benefits		35.5			27.5			25.4			27.5			25.0			-29.6	%		88.5			77.8			-12.1	%
Operating and acquisition expenses		52.7			14.3			27.6			38.9			34.5			-34.5	%		121.4			100.9			-16.9	%
Total Operating Expenses		88.2			41.8			53.0			66.3			59.5			-32.5	%		210.0			178.8			-14.9	%
Income from operations before Federal income taxes		14.7			20.8			16.5			15.1			12.8			-12.9	%		45.9			44.4			-3.3	%
Federal income taxes		5.1			7.2			5.8			5.2			4.5			-11.8	%		16.1			15.5			-3.7	%
Income from Operations	$	9.6		$	13.6		$	10.7		$	9.9		$	8.3			-13.5	%	$	29.7		$	28.9			-2.7	%
Effective tax rate on
Income from Operations		34.8	%		34.7	%		35.1	%		34.4	%		35.2	%					35.1	%		34.9	%
Average equity	$	452.7		$	447.8		$	427.0		$	417.8		$	406.0					$	446.4		$	416.9
Return on average equity		8.4	%		12.1	%		10.0	%		9.5	%		8.2	%					8.9	%		9.3	%
Operating and Acquisition Expenses
Commissions	$	0.9		$	0.1		$	0.9		$	1.1		$	1.4			55.6	%	$	2.2		$	3.4			54.5	%
General and administrative expenses		24.9			24.2			22.7			23.9			25.1			0.8	%		74.1			71.6			-3.4	%
Total commissions and expenses incurred		25.8			24.3			23.6			25.0			26.4			2.3	%		76.3			75.0			-1.7	%
Less: commissions and expenses capitalized		(0.7	)		(0.7	)		(0.5	)		(0.1	)		(0.6	)		14.3	%		(2.1	)		(1.2	)		42.9	%
Amortization of DAC and VOBA		27.5			(9.3	)		4.5			13.9			8.7			-68.4	%		47.2			27.1			-42.6	%
																										NM
Net Operating and Acquisition Expenses	$	52.7		$	14.3		$	27.6		$	38.9		$	34.5			-34.5	%	$	121.4		$	100.9			-16.9	%
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	792.4		$	753.5		$	743.4		$	747.2		$	781.7					$	867.0		$	743.4
Deferral		0.7			0.7			0.5			0.1			0.6						2.1			1.2
Amortization		(27.5	)		9.3			(4.5	)		(13.9	)		(8.7	)					(47.2	)		(27.1	)
Included in Total Benefits and Expenses		(26.8	)		10.0			(4.0	)		(13.8	)		(8.0	)					(45.1	)		(25.9	)
Foreign currency translation adjustment		(12.1	)		(20.0	)		7.7			48.3			9.7						(68.5	)		65.8
Balance at end of period	$	753.5		$	743.4		$	747.2		$	781.7		$	783.4					$	753.5		$	783.4
Roll Forward of Deferred Front-End Load
Balance at beginning of period	$	399.8		$	365.8		$	363.1		$	364.5		$	381.2					$	437.5		$	363.1
Deferral		0.9			0.7			1.0			0.8			0.8						3.5			2.6
Amortization		(29.0	)		6.0			(3.4	)		(7.6	)		6.1						(40.8	)		(5.0	)
Included in Income from Operations		(28.1	)		6.7			(2.4	)		(6.9	)		6.9						(37.3	)		(2.3	)
Foreign currency translation adjustment		(5.9	)		(9.5	)		3.8			23.6			4.7						(34.4	)		32.0
Balance at end of period	$	365.8		$	363.1		$	364.5		$	381.2		$	392.8					$	365.8		$	392.8

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 30

Lincoln UK

Operational Data

Unaudited [Billions of Dollars]

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2005			2005			2006			2006			2006			Change			2005			2006			Change
Unit Linked Assets
Balance-Beg-of-Period	$	6.903		$	7.180		$	7.320		$	7.754		$	7.857			13.8	%	$	7.186		$	7.320			1.9	%
Deposits		0.088			0.156			0.069			0.073			0.105			19.3	%		0.233			0.247			6.0	%
Withdrawals (including charges) and Deaths		(0.192	)		(0.178	)		(0.186	)		(0.201	)		(0.218	)		-13.5	%		(0.550	)		(0.606	)		-10.2	%
Net Flows		(0.104	)		(0.023	)		(0.118	)		(0.128	)		(0.113	)		-8.7	%		(0.316	)		(0.359	)		-13.6	%
Investment income and change in market value		0.492			0.347			0.479			(0.267	)		0.275			-44.1	%		0.896			0.487			-45.6	%
Foreign Currency Adjustment		(0.111	)		(0.184	)		0.072			0.500			0.098			NM			(0.586	)		0.670			NM
Unit Linked Assets - End-of-Period	$	7.180		$	7.320		$	7.754		$	7.857		$	8.118			13.1	%	$	7.180		$	8.118			13.1	%
Individual Life In-force	$	18.175		$	17.521		$	17.744		$	18.289		$	18.464			1.6	%	$	18.175		$	18.464			1.6	%
Exchange Rate - Dollars to Pounds
For-the-Period		1.779			1.747			1.754			1.829			1.878			5.6	%		1.846			1.820			-1.4	%
End-of-Period		1.764			1.719			1.737			1.849			1.872			6.1	%		1.764			1.872			6.1	%

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 31

Lincoln Financial Media

Income Statements

Unaudited [Millions of Dollars]

	Three Months Ended														Nine Months Ended
	Sept.		Dec.		March		June			Sept.			%		Sept.		Sept.			%
	2005		2005		2006		2006			2006			Change		2005		2006			Change
Operating Results
Communications revenues, net	$	-	$	-	$	-	$	57.5		$	59.8			NM	$	-	$	117.3			NM
Cost of sales		-		-		-		7.6			10.3			NM		-		17.9			NM
Operating expenses		-		-		-		22.2			21.0			NM		-		43.3			NM
Station operating income		-		-		-		27.7			28.5			NM		-		56.1			NM
Depreciation and amortization		-		-		-		6.0			2.7			NM		-		8.7			NM
General and administrative expenses		-		-		-		1.8			1.4			NM		-		3.2			NM
Taxes, licenses and fees		-		-		-		-			1.5			NM		-		1.5			NM
Net interest expense and other		-		-		-		0.3			0.3			NM		-		0.6			NM
Income from operations before Federal income taxes		-		-		-		19.6			22.6			NM		-		42.2			NM
Federal income taxes		-		-		-		7.7			8.0			NM		-		15.7			NM
Income from Operations	$	-	$	-	$	-	$	11.9		$	14.6			NM	$	-	$	26.5			NM
Effective tax rate on
Income from Operations								39.3	%		35.4	%						37.2	%

Other Operations ⁽¹⁾

Unaudited [Millions of Dollars]

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2005			2005			2006			2006			2006			Change			2005			2006			Change
Operating Revenue
Earnings on investments & other income	$	27.0		$	10.0		$	12.9		$	48.8		$	32.7			21.1	%	$	89.5		$	94.4			5.5	%
Amortization of deferred gain on
indemnity reinsurance (2)		18.9			18.9			18.8			18.8			18.8			-0.5	%		56.8			56.3			-0.9	%
Total Operating Revenue		45.9			28.9			31.7			67.6			51.4			12.0	%		146.3			150.7			3.0	%
Operating Expenses
Interest on debt		21.4			21.8			21.5			64.3			66.7			211.7	%		65.4			152.5			133.2	%
Operating expenses		28.5			12.8			12.2			46.3			12.1			-57.5	%		85.4			70.6			-17.3	%
Total Operating Expenses		49.9			34.6			33.7			110.6			78.8			57.9	%		150.8			223.1			47.9	%
Income (loss) from operations before Federal income taxes		(4.0	)		(5.7	)		(2.0	)		(43.1	)		(27.4	)		NM			(4.4	)		(72.4	)		NM
Federal income taxes (3)		(16.3	)		(15.4	)		(2.2	)		(17.0	)		(15.9	)		2.5	%		(49.2	)		(35.0	)		28.9	%
Income (loss) from Operations	$	12.2		$	9.6		$	0.1		$	(26.1	)	$	(11.5	)		NM		$	44.7		$	(37.4	)		NM

⁽¹⁾ Includes eliminations of intercompany transactions.

⁽²⁾ Represents the amortization of deferred gain recognized on the business sold through indemnity reinsurance to Swiss Re.

⁽³⁾ 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

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 32

Consolidated Domestic Deposits/Account Balances

Unaudited [Billions of Dollars]

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.			%
	2005			2005			2006			2006			2006			Change			2005			2006			Change
Deposits - For the Period
Individual Markets - Fixed Annuities	$	0.494		$	0.486		$	0.471		$	0.872		$	1.062			115.0	%	$	1.501		$	2.405			60.2	%
Individual Markets - Variable Annuities		1.410			1.513			1.665			1.867			1.658			17.6	%		4.026			5.191			28.9	%
Individual Markets - Life Insurance		0.497			0.596			0.488			1.023			0.753			51.5	%		1.435			2.264			57.8	%
Employer Markets - Fixed Annuities		0.259			0.240			0.253			0.242			0.268			3.5	%		0.843			0.763			-9.5	%
Employer Markets - Variable Products (1)		0.752			0.839			0.987			0.918			0.818			8.8	%		2.481			2.723			9.8	%
Employer Markets - Executive Benefits		0.057			0.052			0.047			0.077			0.058			1.8	%		0.158			0.182			15.2	%
Inv Mgmt - Annuities		0.642			0.713			0.885			0.869			0.960			49.5	%		2.056			2.715			32.1	%
Inv Mgmt - Mutual Funds		1.331			1.657			1.329			1.370			1.151			-13.5	%		4.338			3.849			-11.3	%
Inv Mgmt - Managed Acct. & Other		1.599			1.260			1.806			1.043			0.386			-75.9	%		5.079			3.235			-36.3	%
Consolidating Adjustments		(0.624	)		(0.617	)		(0.481	)		(0.773	)		(0.817	)		-30.9	%		(1.818	)		(2.071	)		-13.9	%
Total Gross Retail Deposits		6.417			6.737			7.449			7.509			6.297			-1.9	%		20.098			21.255			5.8	%
Inv Mgmt - Institutional		3.166			4.833			5.044			2.764			2.406			-24.0	%		11.469			10.214			-10.9	%
Consolidating Adjustments		(0.217	)		(0.265	)		(0.257	)		(0.365	)		(0.202	)		6.9	%		(0.765	)		(0.824	)		-7.7	%
Total Gross Deposits	$	9.366		$	11.305		$	12.236		$	9.907		$	8.501			-9.2	%	$	30.802		$	30.645			-0.5	%
Account Balances - End of Period
Individual Markets - Fixed Annuities	$	9.117		$	8.607		$	8.362		$	17.384		$	16.894			85.3	%	$	9.117		$	16.894			85.3	%
Individual Markets - Variable Annuities		35.276			37.655			40.495			41.537			43.977			24.7	%		35.276			43.977			24.7	%
Individual Markets - Life Insurance		13.745			14.051			14.268			25.479			25.821			87.9	%		13.745			25.821			87.9	%
Employer Markets - Fixed Annuities		10.686			11.009			11.033			11.050			11.061			3.5	%		10.686			11.061			3.5	%
Employer Markets - Variable Products (1)		18.965			19.464			20.702			20.475			21.166			11.6	%		18.965			21.166			11.6	%
Employer Markets - Executive Benefits		1.256			1.318			1.387			4.228			4.252			238.5	%		1.256			4.252			238.5	%
Inv Mgmt - Annuities		13.022			13.287			13.998			13.577			14.129			8.5	%		13.022			14.129			8.5	%
Inv Mgmt - Mutual Funds		15.738			16.231			17.101			16.654			17.068			8.5	%		15.738			17.068			8.5	%
Inv Mgmt - Managed Acct. & Other		11.599			12.839			15.162			15.812			16.279			40.3	%		11.599			16.279			40.3	%
Consolidating Adjustments		(12.229	)		(12.602	)		(13.282	)		(13.057	)		(13.649	)		-11.6	%		(12.229	)		(13.649	)		-11.6	%
Total Retail Account Balances		117.175			121.858			129.225			153.137			156.998			34.0	%		117.175			156.998			34.0	%
Inv Mgmt - Institutional		32.915			35.276			40.167			39.883			42.035			27.7	%		32.915			42.035			27.7	%
Consolidating Adjustments		(3.559	)		(3.422	)		(3.573	)		(3.557	)		(3.510	)		1.4	%		(3.559	)		(3.510	)		1.4	%
Total Account Balances	$	146.530		$	153.712		$	165.820		$	189.464		$	195.524			33.4	%	$	146.530		$	195.524			33.4	%

Total Domestic Net Flows

Unaudited [Billions of Dollars]

	Three Months Ended																		Nine Months Ended
	Sept.			Dec.			March			June			Sept.			%			Sept.			Sept.		%
For the Period Ended	2005			2005			2006			2006			2006			Change			2005			2006		Change
Individual Markets - Life	$	0.295		$	0.400		$	0.257		$	0.548		$	0.491			66.4	%	$	0.794		$	1.296		63.2	%
Individual Markets - Annuities		0.717			0.767			0.770			0.699			0.304			-57.6	%		2.109			1.773		-15.9	%
Employer Markets - Defined Contribution		0.028			(0.026	)		0.181			0.114			0.037			32.1	%		0.445			0.331		-25.6	%
Employer Markets - Executive Benefits		0.042			0.049			0.039			0.035			(0.011	)		NM			0.112			0.064		-42.9	%
Investment Management - Retail		1.720			1.148			1.305			0.322			(0.300	)		NM			5.294			1.327		-74.9	%
Consolidating Adjustments		(0.053	)		0.015			0.083			(0.009	)		0.012			NM			0.036			0.086		138.9	%
Total Retail Net Flows		2.749			2.354			2.635			1.709			0.532			-80.6	%		8.790			4.876		-44.5	%
Investment Management - Institutional		1.825			1.733			3.592			0.687			1.046			-42.7	%		7.045			5.324		-24.4	%
Consolidating Adjustments		(0.050	)		0.198			(0.039	)		(0.047	)		0.139			NM			(0.075	)		0.053		NM
Total Net Flows	$	4.524		$	4.285		$	6.188		$	2.349		$	1.717			-62.0	%	$	15.760		$	10.254		-34.9	%

(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 is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 33

Consolidated Investment Data - Assets Managed

Unaudited [Billions of Dollars]

	As of
	Sept.		Dec.		March		June		Sept.		%
	2005		2005		2006		2006		2006		Change
Assets Managed by Source
LNC's Investments and Cash:
Fixed maturity securities -
available for sale	$	34.325	$	33.443	$	32.893	$	54.024	$	55.825		62.6	%
Equity securities - available for sale		0.152		0.145		0.176		0.579		0.662		NM
Trading securities		3.287		3.246		3.190		3.109		3.172		-3.5	%
Other investments		6.322		6.334		6.314		12.003		11.948		89.0	%
Total LNC Investments		44.085		43.168		42.573		69.714		71.608		62.4	%
Separate accounts		60.812		63.747		67.984		71.095		74.357		22.3	%
Cash and invested cash		1.602		2.312		1.974		1.500		1.108		-30.8	%
Total LNC		106.498		109.227		112.531		142.309		147.073		38.1	%
Non-affiliate assets managed		58.446		62.528		70.464		70.185		73.227		25.3	%
Total Assets Managed	$	164.944	$	171.755	$	182.995	$	212.495	$	220.300		33.6	%
Assets Managed by Advisor
Investment Management segment
(See page 28 for additional detail)	$	73.274	$	77.633	$	86.428	$	85.926	$	89.511		22.2	%
DLIA-Corp
(Assets managed internally-see page 28)		43.095		43.086		41.995		65.637		67.410		56.4	%
Lincoln UK		8.518		8.562		8.986		9.171		9.440		10.8	%
Domestic Policy Loans (excluding Lincoln UK)		1.851		1.858		1.856		2.712		2.720		46.9	%
Non-LNC Affiliates		38.205		40.617		43.729		49.049		51.219		34.1	%
Total Assets Managed	$	164.944	$	171.755	$	182.995	$	212.495	$	220.300		33.6	%

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.

9/30/2006 PAGE 34

Consolidated Investment Data

Unaudited [Millions of Dollars]

	Three Months Ended
	Sept.			Dec.			March			June			Sept.			%
	2005			2005			2006			2006			2006			Change
Net Investment Income
Fixed maturity AFS securities	$	505.7		$	509.7		$	513.7		$	829.0		$	824.8			63.1	%
Equity AFS securities		2.4			3.3			2.1			8.6			7.9			229.2	%
Trading securities		48.6			48.7			49.7			49.4			49.2			1.2	%
Mortgage loans on real estate		70.9			75.1			67.2			135.0			137.8			94.4	%
Real estate		8.5			5.6			9.1			13.2			13.3			56.5	%
Policy loans		29.8			29.2			29.7			42.5			43.0			44.3	%
Invested cash		17.0			19.2			22.8			22.2			33.0			94.1	%
Other investments		16.4			7.0			14.6			10.2			41.3			151.8	%
Investment revenue		699.3			697.9			708.8			1,110.1			1,150.3			64.5	%
Investment expense		(28.5	)		(29.8	)		(30.4	)		(41.9	)		(42.4	)		-48.8	%
Net Investment Income	$	670.8		$	668.1		$	678.3		$	1,068.2		$	1,107.9			65.2	%
Mean Invested Assets (Amortized Cost)	$	44,040.1		$	44,035.2		$	44,363.6		$	70,933.3		$	70,646.9
Ratio of Net Invest Income Over Mean Invested Assets		6.09	%		6.07	%		6.12	%		6.02	%		6.27%
		Three Months Ended
		Sept.			Dec.			March			June			Sept.			%
		2005			2005			2006			2006			2006			Change
Realized Investment Gains (Losses)
Fixed maturities	$	8.2		$	(5.6	)	$	4.3		$	8.2		$	5.8			-29.3	%
Equity securities		(0.6	)		2.2			0.3			(1.1	)		-			NM
Other gains (losses), net		5.4			6.3			(0.1	)		6.3			(5.5	)		NM
Policyholders' interest		0.7			(1.3	)		(1.8	)		(1.4	)		2.0			185.7	%
Capital gains expense		(2.4	)		(2.3	)		(2.4	)		-			-			NM
Sale of affiliate		-			-			-			-			-			NM
Total pretax gains (losses)		11.3			(0.8	)		0.3			12.0			2.2			-80.5	%
Amortization of DAC, VOBA and deferred
sales inducements		(14.0	)		(8.8	)		(10.8	)		(18.9	)		(8.9	)		36.4	%
Income taxes		(0.7	)		(3.3	)		(3.3	)		(2.9	)		(1.7	)		NM
Realized investment gains (losses), net of taxes	$	(2.0	)	$	(6.2	)	$	(7.2	)	$	(4.0	)	$	(5.0	)		NM
					As of September 30, 2006									As of December 31, 2005
					Amount			% of Total						Amount			% of Total
Available-for-Sale and Trading Securities [Millions of Dollars]
Fixed Maturity Sec (Fair Value)				$	58,997.4			98.9	%				$	36,687.1			99.6	%
Fixed Maturity Sec (Amortized Cost)					57,855.6			98.9	%					35,347.6			99.6	%
Equity Securities (Fair Value)				$	662.0			1.1	%					146.9			0.4	%
Equity Securities (Amortized Cost)					619.6			1.1	%					139.0			0.4	%
% of Available-for-Sale Fixed Maturity Securities (Based on Fair Value)
Treasuries and AAA								19.6	%								23.4	%
AA or better								27.5	%								30.9	%
BB or less								6.4	%								7.4	%
General Account Investments					As of September 30, 2006									As of December 31, 2005
					Amount			% of Total						Amount			% of Total
Fixed maturities- security sector:
Corporate bonds				$	45,345.3			81.3	%				$	25,860.7			77.3	%
U.S. government bonds					291.6			0.5	%					161.8			0.5	%
Foreign government bonds					1,144.4			2.0	%					1,203.3			3.6	%
Mortgage backed securities					8,765.1			15.7	%					5,951.2			17.8	%
State and municipal bonds					160.7			0.3	%					128.8			0.4	%
Preferred stocks - redeemable					117.8			0.2	%					137.4			0.4	%
Total				$	55,824.9			100.0	%				$	33,443.2			100.0	%
		As of
		Sept.			Dec.			March			June			Sept.			%
		2005			2005			2006			2006			2006			Change
Composition of Investment Portfolio:
Securities available-for-sale, at fair value:
Fixed Maturity	$	34,324.9		$	33,443.2		$	32,892.8		$	54,024.1		$	55,824.9			62.6	%
Equity		151.6			144.7			176.0			578.5			662.0			NM
Trading securities		3,287.0			3,246.0			3,190.1			3,109.0			3,172.5			-3.5	%
Mortgage loans on real estate & real estate		3,892.8			3,845.3			3,766.5			8,169.7			8,004.5			105.6	%
Policy loans		1,856.4			1,862.2			1,860.4			2,716.4			2,724.9			46.8	%
Derivative Investments		155.9			174.7			199.3			279.6			349.4			124.1	%
Other investments		416.4			452.2			488.2			837.0			869.3			108.8	%
Total	$	44,085.0		$	43,168.4		$	42,573.2		$	69,714.4		$	71,607.5			62.4	%

This is a dated document. It may not be accurate after such date and LNC does not undertake to update or keep it accurate after such date.