Lincoln National (LNC) 8-K Record fourth quarter variable annuity sales of $3.4 billion, up 31% over the prior year

Lincoln Statistical Report
		fourth Q U A R T E R
	2 0 0 7
The financial data in this document is dated February 4, 2008 and has not been updated since that date.  LNC does not intend to update this document.

Lincoln Financial Group
Statistical Report
Fourth Quarter
2007
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	8-9
Consolidated Balance Sheets	10
Balance Sheet Data - Segment Highlights	11
Individual Markets
Individual Life Insurance
Income Statements & Operational Data	12
Operational Data	13
Account Value Roll Forward	14
Individual Annuities
Income Statements & Operational Data	15
Account Value Roll Forward	16
Account Values	17
Employer Markets
Defined Contribution
Income Statements & Operational Data	18
Account Value Roll Forward	19
Supplemental Data	20
Executive Benefits
Income Statements & Operational Data	21
Account Value Roll Forward and Supplemental Data	22
Group Protection
Income Statements & Operational Data	23
Supplemental Data	24
Investment Management
Income Statements	25
Assets Under Management Roll Forward	26
Lincoln UK
Income Statements	27
Operational Data	28
Other Operations	29
Discontinued Operations	29
Domestic Deposits / Account Balances / Net Flows	30
Investment Data
Assets Managed	31
Other Investment Data	32

12/31/2007		ii
NOTES
On April 3, 2006, we completed our merger with Jefferson Pilot Corporation ("JP") and have included the results of operations
and financial condition of JP since then.
Definitions and Presentation
"Income from Operations," "Operating Revenue," and "Return on Capital" 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 initial impact of the adoption of changes in accounting principles,
	*    Reserve changes on business sold through reinsurance net of related deferred gain amortization,
	*    Gains and losses on the sale of subsidiaries and blocks of business,
	*    Loss on early retirement of debt, including subordinated debt, and
	*    Income (loss) from discontinued 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.
Income from operations, operating revenue, and return on capital are internal measures used by LNC in the management of its
operations.  Management believes that these performance measures explain the results of operations of LNC's ongoing
operations in a manner that allows for a better understanding of the underlying trends in LNC's current business because the
excluded items are either unpredictable and/or not related to decisions regarding the underlying businesses.
*	Certain operating and statistical measures are included in this report to provide supplemental data regarding the
	performance of LNC's current business.  These measures include deposits, sales, net flows, first year premium,
	inforce, spreads, and assets under management.
*	Sales as reported consist of the following:
	*    Universal life ("UL"), including Moneyguard, and Corporate Owned Life Insurance ("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.
During the third quarter of 2007, we added additional detail to our roll forwards of Deferred Acquisition Costs ("DAC") and Value
of Business Acquired ("VOBA"), Deferred Sales Inducements ("DSI") and Deferred Front-End Loads ("DFEL") to disclose the
net impact of prospective and retrospective unlocking on amortization for these accounts.  This additional information will help
explain a source of volatility in amortization.
*	Prospective unlocking - In the third quarter of each year, we review and update our assumptions used in projecting
	our future estimated gross profits (EGPs) used to amortize DAC, VOBA, DFEL and DSI.  These updates to
	assumptions result in unlocking that represent an increase or decrease to our carrying value of DAC, VOBA, DFEL
	and DSI based upon our updated view of future EGPs.  The various assumptions that are reviewed include
	investment margins, mortality, expenses and persistency.
*	Retrospective unlocking - On a quarterly basis, we “true-up” our models for actual gross profits and in-force
	experience for the period, and to the extent that actual experience differs from previously expected a positive or
	negative retrospective adjustment to the amortization of DAC, VOBA, DSI and DFEL is recorded.  This update to the
	models may generate a change in the amortization rate which results in a catch-up to the cumulative amortization,
	by recalculating the DAC, VOBA, DSI and DFEL balances assuming that the revised amortization rate had been
	used since issue.
*	Our unlocking process also includes our reserves for our guaranteed benefit features and is described more fully
	in “Part II - Item 7 - Management’s Discussion and Analysis of Financial Condition, Results of Operations - Critical
	Accounting Policies” of our 2006 Form 10-K.

Book value per share excluding accumulated other comprehensive income ("AOCI") is calculated based upon a non-GAAP

financial measure. It is calculated by dividing (a) stockholders' equity excluding AOCI, by (b) common shares outstanding. We

provide book value per share excluding AOCI to enable investors to analyze the amount of our net worth that is primarily

attributable to our business operations. We believe book value per share excluding AOCI is useful to investors because it

eliminates the effect of items that can fluctuate significantly from period to period, primarily based on changes in interest rates.

Book value per share is the most directly comparable GAAP measure.

Pre-tax operating margin is calculated as Income (Loss) from Operations before Federal Income Taxes divided by Operating

Revenue.

After-tax operating margin is calculated as Income (Loss) from Operations divided by Operating Revenue.

In 2007, we executed plans to divest our television broadcasting, sports programming and Charlotte radio stations.  During the

fourth quarter of 2007, we entered into a definitive agreement to sell three television stations, three radio stations and our sports

syndication agreement.  Accordingly, the assets and liabilities of these businesses have been reclassified as held-for-sale for

all periods presented, and are reported within other assets and other liabilities on the Consolidated Balance Sheets.  The results

of operations of these businesses have been reclassified into income from discontinued operations for all periods presented

on the Financial Highlights, Operating Results Summary and  Consolidated Statements of Income.  Consequently, we have

eliminated the Lincoln Financial Media segment and now report our remaining media properties within Other Operations for all

periods presented.

Reclassifications

Certain amounts reported in prior periods have been reclassified to conform to the current presentation.  These reclassifications

have no effect on net income or shareholders' equity in the prior periods.

12/31/2007																						PAGE 1
Financial Highlights
Unaudited [Millions of Dollars, except Common Share Data]
	For the Quarter Ended December 31												For the Year Ended December 31
	2007			2006									2007			2006
	Amount			Amount			Change			% Change			Amount			Amount			Change			% Change
Income from Operations - By Segment
Individual Life Insurance	$	158.8		$	157.4		$	1.4			0.9	%	$	675.4		$	496.3		$	179.1			36.1	%
Individual Annuities		90.0			123.8			(33.8	)		-27.3	%		448.0			408.6			39.4			9.6	%
Individual Markets		248.8			281.1			(32.3	)		-11.5	%		1,123.4			904.9			218.5			24.1	%
Defined Contribution		43.1			44.6			(1.5	)		-3.4	%		181.3			203.9			(22.6	)		-11.1	%
Executive Benefits		15.0			12.7			2.3			18.1	%		54.3			49.2			5.1			10.4	%
Group Protection		28.2			33.2			(5.0	)		-15.1	%		113.5			99.0			14.5			14.6	%
Employer Markets		86.2			90.5			(4.3	)		-4.8	%		349.1			352.1			(3.0	)		-0.9	%
Investment Management		27.0			14.4			12.6			87.5	%		76.4			55.2			21.2			38.4	%
Lincoln UK		12.7			9.9			2.8			28.3	%		45.6			38.9			6.7			17.2	%
Other Operations		(62.4	)		(30.0	)		(32.4	)	NM				(184.1	)		(53.2	)		(130.9	)	NM
Total Income from Operations (1)		312.3			366.1			(53.8	)		-14.7	%		1,410.5			1,297.7			112.8			8.7	%
Realized gain (loss) on investments and derivatives		(71.3	)		9.4			(80.7	)	NM				(82.3	)		(2.6	)		(79.7	)	NM
Net gain (loss) on reinsurance
derivative/trading account securities		(0.3	)		0.1			(0.4	)	NM				1.3			2.0			(0.7	)		-35.0	%
Loss on sale of subsidiaries/ businesses		(1.8	)		-			(1.8	)	NM				(1.8	)		-			(1.8	)	NM
Reserve development, net of related amortization
on business sold through indemnity reinsurance		0.4			0.2			0.2			100.0	%		(6.9	)		0.8			(7.7	)	NM
Early extinguishment of debt		-			(3.6	)		3.6			100.0	%		-			(3.6	)		3.6			100.0	%
Income (loss) from discontinued operations (2)		(126.8	)		9.1			(135.9	)	NM				(106.2	)		21.3			(127.5	)	NM
Net Income	$	112.5		$	381.3		$	(268.8	)		-70.5	%	$	1,214.6		$	1,315.6		$	(101.0	)		-7.7	%
Earnings per share (diluted)
Income from Operations (1)	$	1.16		$	1.31		$	(0.15	)		-11.5	%	$	5.15		$	5.06		$	0.09			1.8	%
Realized gain (loss) on investments and derivatives		(0.26	)		0.03			(0.29	)	NM				(0.29	)		(0.01	)		(0.28	)	NM
Net gain (loss) on reinsurance
derivative/trading account securities		-			-			-		NM				-			0.01			(0.01	)		-100.0	%
Loss on sale of subsidiaries/ businesses		(0.01	)		-			(0.01	)	NM				(0.01	)		-			(0.01	)	NM
Reserve development, net of related amortization
on business sold through indemnity reinsurance		-			-			-		NM				(0.03	)		-			(0.03	)	NM
Early extinguishment of debt		-			(0.01	)		0.01			100.0	%		-			(0.01	)		0.01			100.0	%
Income (loss) from discontinued operations (2)		(0.47	)		0.03			(0.50	)	NM				(0.39	)		0.08			(0.47	)	NM
Net Income	$	0.42		$	1.36		$	(0.94	)		-69.1	%	$	4.43		$	5.13		$	(0.70	)		-13.6	%
	$	-		$	-												-
Operating Revenues- By Segment
Individual Life Insurance	$	1,001.7		$	958.4		$	43.3			4.5	%	$	3,920.7		$	3,255.8		$	664.9			20.4	%
Individual Annuities		653.6			637.3			16.3			2.6	%		2,600.3			2,161.2			439.1			20.3	%
Individual Markets		1,655.3			1,595.7			59.6			3.7	%		6,521.0			5,417.0			1,104.0			20.4	%
Defined Contribution		243.3			245.0			(1.7	)		-0.7	%		985.6			988.2			(2.6	)		-0.3	%
Executive Benefits		114.9			109.1			5.8			5.3	%		455.0			371.8			83.2			22.4	%
Group Protection		380.6			344.8			35.8			10.4	%		1,499.6			1,031.8			467.8			45.3	%
Employer Markets		738.8			698.9			39.9			5.7	%		2,940.2			2,391.7			548.5			22.9	%
Investment Management		139.0			148.9			(9.9	)		-6.6	%		590.2			563.5			26.7			4.7	%
Lincoln UK		98.3			84.8			13.5			15.9	%		370.2			308.0			62.2			20.2	%
Other Operations		77.8			74.6			3.2			4.3	%		281.0			282.7			(1.7	)		-0.6	%
Total Operating Revenues		2,709.3			2,602.9			106.4			4.1	%		10,702.6			8,962.9			1,739.7			19.4	%
Realized gain (loss) on investments and derivatives		(108.9	)		12.8			(121.7	)	NM				(126.5	)		(6.7	)		(119.8	)	NM
Gain (loss) on reinsurance
derivative/trading account securities		(0.8	)		1.2			(2.0	)	NM				1.8			4.1			(2.3	)		-56.1	%
Gain on sale of subsidiaries/ businesses		6.2			-			6.2		NM				6.2			-			6.2		NM
Amortization of deferred gain on
indemnity reinsurance related to reserve developments		0.7			0.3			0.4			133.3	%		9.4			1.3			8.1		NM
Total Revenues	$	2,606.5		$	2,617.2		$	(10.7	)		-0.4	%	$	10,593.6		$	8,961.6		$	1,632.0			18.2	%
					0.0												0.0

(1) Income from operations includes after-tax restructuring charges of $1.9 million, or 1 cent per share, and $2.1 million, or 1 cent per share, for the quarters ended December 31, 2007 and 2006, respectively, and $13.2 million, or 5 cents per share, and $9.3 million, or 4 cents per share, for the years ended December 31, 2007 and 2006, respectively.

(2) Contains discontinued operations and the loss on disposition.  See discontinued operations on page 29 for additional details.

12/31/2007																						PAGE 2
Financial Highlights
Unaudited [in Billions]
Operational Data by Segment	For the Quarter Ended December 31												For the Year Ended December 31
	2007			2006									2007			2006
	Amount			Amount			Change			% Change			Amount			Amount			Change			% Change
Individual Markets
Individual Annuities
Gross deposits	$	3.880		$	3.161		$	0.720			22.8	%	$	13.457		$	10.756		$	2.701			25.1	%
Net flows		1.808			0.892			0.916			102.7	%		4.991			2.665			2.326			87.3	%
Account values (gross)		76.464			66.714			9.750			14.6	%		76.464			66.714			9.750			14.6	%
Account values (net of reinsurance)		75.113			64.902			10.211			15.7	%		75.113			64.902			10.211			15.7	%
Individual Life Insurance
Sales (in millions) (1)		182.1			218.1			(36.0	)		-16.5	%		745.6			570.8			174.7			30.6	%
Life insurance in-force		520.224			501.376			18.848			3.8	%		520.224			501.376			18.848			3.8	%
Account values		28.122			26.490			1.632			6.2	%		28.122			26.490			1.632			6.2	%
Employer Markets
Defined Contribution
Gross deposits  (2)	$	1.265		$	1.099		$	0.166			15.1	%	$	5.550		$	4.585		$	0.965			21.0	%
Net flows		(0.091	)		0.010			(0.101	)	NM				0.337			0.342			(0.005	)		-1.5	%
Account values - annuities		28.765			28.482			0.283			1.0	%		28.765			28.482			0.283			1.0	%
Alliance Mutual Funds		7.293			5.175			2.118			40.9	%		7.293			5.175			2.118			40.9	%
Account values including Alliance Mutual Funds		36.058			33.656			2.401			7.1	%		36.058			33.656			2.401			7.1	%
Executive Benefits
COLI/BOLI sales  (in millions)		39.4			32.5			6.9			21.2	%		91.4			82.9			8.5			10.3	%
Life insurance in-force		15.292			15.645			(0.353	)		-2.3	%		15.292			15.645			(0.353	)		-2.3	%
Account values		4.436			4.305			0.131			3.0	%		4.436			4.305			0.131			3.0	%
Group Protection
Annualized sales (in millions)		142.6			113.1			29.5			26.1	%		326.1			208.7			117.4			56.3	%
Loss ratio(3)		70.7	%		69.1	%	NM			NM				70.7	%		67.4	%	NM			NM
Investment Management Segment
Retail sales	$	3.592		$	3.192		$	0.400			12.5	%	$	13.279		$	12.991		$	0.288			2.2	%
Retail net flows		(0.649	)		0.050			(0.699	)	NM				(1.026	)		1.377			(2.403	)	NM
Institutional in-flows		2.230			4.888			(2.658	)		-54.4	%		10.472			15.102			(4.630	)		-30.7	%
Institutional net flows		(0.302	)		2.666			(2.968	)	NM				(0.346	)		7.991			(8.337	)	NM
Total Sales and In-flows		5.822			8.080			(2.258	)		-27.9	%		23.752			28.093			(4.342	)		-15.5	%
Total Net Flows		(0.950	)		2.717			(3.667	)	NM				(1.372	)		9.368			(10.740	)	NM
Assets Under Management- Retail and Institutional		85.357			97.307			(11.949	)		-12.3	%		85.357			97.307			(11.949	)		-12.3	%
Assets Under Management - General Account		67.416			67.437			(0.020	)		-			67.416			67.437			(0.020	)		-
Assets Under Management - Total Segment		152.774			164.743			(11.969	)		-7.3	%		152.774			164.743			(11.969	)		-7.3	%
Consolidated
Domestic Retail Deposits	$	9.005		$	7.805		$	1.200			15.4	%	$	33.206		$	29.060		$	4.146			14.3	%
Domestic Retail Account Balances		181.644			165.287			16.357			9.9	%		181.644			165.287			16.357			9.9	%
Domestic Retail Net Flows		1.991			1.580			0.410			25.9	%		7.484			6.457			1.028			15.9	%
Domestic Deposits		11.043			12.584			(1.541	)		-12.2	%		43.157			43.229			(0.071	)		-0.2	%
Domestic Net Flows		1.821			4.315			(2.494	)		-57.8	%		7.421			14.569			(7.148	)		-49.1	%
Assets Under Management		236.675			233.523			3.153			1.4	%		236.675			233.523			3.153			1.4	%

(1) Sales for Individual Life Insurance consist of first year commissionable premium for Universal Life ("UL"), including MoneyGuard, 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.

12/31/2007																						PAGE 3
Financial Highlights
Unaudited [Millions of Dollars, except Common Share Data]
	For the Quarter Ended December 31												For the Year Ended December 31
	2007			2006									2007			2006
	Amount			Amount			Change			% Change			Amount			Amount			Change			% Change
Balance Sheet Assets - End of Period	$	191,437.1		$	178,493.7		$	12,943.4			7.3	%	$	191,437.1		$	178,493.7		$	12,943.4			7.3	%
Shareholders' Equity
Beg of period (including AOCI)	$	11,963.0		$	12,043.2		$	(80.1	)				$	12,201.0		$	6,384.4		$	5,816.6
End of period (including AOCI)		11,728.7			12,201.0			(472.3	)					11,728.7			12,201.0			(472.3	)
End of period (excluding AOCI)		11,493.1			11,587.9			(94.8	)					11,493.1			11,587.9			(94.8	)
Average equity (excluding AOCI)		11,629.6			11,512.0			117.7						11,591.4			10,054.0			1,537.4
Return on Equity
Net income/average equity (excluding AOCI)		3.9	%		13.2	%								10.5	%		13.1	%
Inc from operations/average equity (excluding AOCI)		10.7	%		12.7	%								12.2	%		12.9	%
Return on Capital
Inc from operations/average capital		8.8	%		10.4	%								9.8	%		10.6	%
Common Stock Outstanding
Average for the period - diluted		269.4			280.4			(11.0	)		-3.9	%		273.9			256.2			17.7			6.9	%
End of period - assuming conv of preferreds		264.4			276.0			(11.5	)		-4.2	%		264.4			276.0			(11.5	)		-4.2	%
End of period - diluted		266.2			280.2			(14.0	)		-5.0	%		266.2			280.2			(14.0	)		-5.0	%
Book value (including AOCI)	$	44.36		$	44.21		$	0.14			0.3	%	$	44.36		$	44.21		$	0.14			0.3	%
Book value (excluding AOCI)		43.46			41.99			1.47			3.5	%	$	43.46		$	41.99		$	1.47			3.5	%
Cash Returned to Shareholders
Share repurchase - dollar amount	$	299.9		$	150.0		$	149.9					$	986.1		$	1,002.5		$	(16.4	)
Dividends declared to shareholders		109.8			108.9			1.0						430.2			428.6			1.7
Total Cash Returned to Shareholders	$	409.7		$	258.9		$	150.8					$	1,416.4		$	1,431.1		$	(14.7	)
Share repurchase - number of shares		5.073			2.504			2.570						15.381			16.877			(1.497	)
Dividend declared on common stock - per share	$	0.415		$	0.395		$	0.020			5.1	%	$	1.600		$	1.535		$	0.065			4.2	%
Dividend payout ratio (1)		98.8	%		29.0	%								36.1	%		29.9	%
Annualized yield(2)		2.9	%		2.4	%								2.7	%		2.3	%
Comprehensive Income (Loss)
Net income	$	112.5		$	381.3								$	1,214.6		$	1,315.6
Net unrealized gains (losses) on securities		96.1			14.8									(378.9	)		(3.7	)
Gains (losses) on derivatives		(44.9	)		(16.7	)								(14.1	)		31.9
Foreign currency translation		(18.8	)		28.7									9.7			81.7
Minimum pension liability adjustment		-			63.2									-			59.5
Funded status of employee benefit plans(4)		6.4			(84.0	)								5.8			(84.0	)
Comprehensive Income	$	151.3		$	387.3								$	837.0		$	1,401.0
Ratios:
Debt to total capitalization (3)		22.2	%		21.1	%								22.2	%		21.1	%
Debt to equity(3)		28.5	%		26.7	%								28.5	%		26.7	%
Ratings as of February 1, 2008:
	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

(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) and $375 million of senior notes issued in October of 2007 because the proceeds were reinvested in a pool of long-term assets.  Capital securities are considered 25% debt and 75% equity.

(4) SFAS 158 was adopted  effective December 31, 2006 which requires the disclosure of the funded status of our pension and post-retirement benefit plans on the balance sheet.

12/31/2007																		PAGE 4
Combined Production Data (1)
Unaudited [in Billions]
	Three Months Ended													Year Ended
	Dec.		March		June		Sept.		Dec.		%			Dec.		Dec.		%
	2006		2007		2007		2007		2007		Change			2006		2007		Change
Individual Markets
Individual Life Insurance
Sales by Product (millions)
Universal Life
Excluding MoneyGuard	$	177.6	$	166.2	$	145.0	$	143.9	$	141.3		-20.4	%	$	478.3	$	596.3		24.7	%
MoneyGuard		7.8		7.4		9.9		10.9		12.1		55.1	%		31.3		40.2		28.4	%
Total		185.4		173.6		154.9		154.8		153.3		-17.3	%		509.6		636.5		24.9	%
Variable Universal Life		22.1		20.6		17.3		17.7		21.9		-0.9	%		67.2		77.4		15.2	%
Whole life		0.6		0.1		0.1		0.3		0.3		-50.0	%		2.9		0.8		-72.4	%
Term		10.0		9.3		7.8		7.2		6.6		-34.0	%		43.1		30.8		-28.5	%
Total Sales by Product	$	218.1	$	203.5	$	180.0	$	179.9	$	182.1		-16.5	%	$	622.9	$	745.6		19.7	%
									$	-
Individual Annuity Deposits
Fixed	$	0.855	$	0.661	$	0.791	$	1.032	$	1.083		26.7	%	$	2.878	$	3.567		23.9	%
Variable		2.061		2.000		2.295		2.247		2.593		25.8	%		7.252		9.135		26.0	%
Indexed annuities		0.245		0.160		0.191		0.199		0.204		-16.7	%		0.890		0.755		-15.2	%
Total Individual Annuities	$	3.161	$	2.821	$	3.277	$	3.478	$	3.880		22.7	%	$	11.018	$	13.457		22.1	%
									$	-
Employer Markets
Defined Contribution
Fixed	$	0.183	$	0.299	$	0.233	$	0.305	$	0.268		46.4	%	$	0.946	$	1.105		16.8	%
Variable		0.559		0.655		0.577		0.564		0.560		0.2	%		2.525		2.355		-6.7	%
		0.742		0.953		0.809		0.869		0.828		11.6	%		3.471		3.460		-0.3	%
Alliance Mutual Funds Deposits		0.357		0.533		0.464		0.656		0.437		22.4	%		1.113		2.090		87.8	%
Total Annuity and Alliance Mutual Funds	$	1.099	$	1.487	$	1.273	$	1.525	$	1.265		15.1	%	$	4.585	$	5.550		21.0	%
Executive Benefits
COLI/BOLI sales (millions)	$	32.5	$	20.4	$	13.6	$	18.0	$	39.4		21.2	%	$	83.5	$	91.4		9.5	%
Group Protection
Annualized Sales (millions)
Life	$	43.1	$	22.7	$	23.6	$	22.0	$	53.9		25.1	%	$	101.4	$	122.3		20.6	%
Disability		56.9		28.6		28.9		30.5		72.1		26.7	%		138.7		160.1		15.4	%
Dental		13.1		9.4		9.5		8.3		16.6		26.7	%		32.6		43.8		34.4	%
Investment Management
Sales and Inflows
Retail
Annuities	$	0.932	$	1.300	$	0.902	$	0.891	$	0.954		2.4	%	$	3.647	$	4.047		11.0	%
Mutual funds		1.768		1.753		1.896		1.543		2.241		26.8	%		5.617		7.433		32.3	%
Managed accounts & other		0.493		0.550		0.474		0.377		0.398		-19.3	%		3.728		1.799		-51.7	%
		3.192		3.603		3.272		2.812		3.592		12.5	%		12.991		13.279		2.2	%
Institutional		4.888		2.431		2.877		2.934		2.230		-54.4	%		15.102		10.472		-30.7	%
Total Sales and Inflows	$	8.080	$	6.034	$	6.149	$	5.746	$	5.822		-27.9	%	$	28.093	$	23.752		-15.5	%
Total Annuity & Alliance
Mutual Fund Deposits
Fixed Annuities
Individual	$	1.100	$	0.821	$	0.982	$	1.231	$	1.288		17.1	%	$	3.767	$	4.321		14.7	%
Employer Markets		0.183		0.299		0.233		0.305		0.268		46.4	%		0.946		1.105		16.8	%
		1.283		1.120		1.215		1.536		1.556		21.3	%		4.713		5.426		15.1	%
Variable Annuities
Individual		2.061		2.000		2.295		2.247		2.593		25.8	%		7.252		9.135		26.0	%
Employer Markets		0.559		0.655		0.577		0.564		0.560		0.2	%		2.525		2.355		-6.7	%
		2.619		2.655		2.872		2.811		3.152		20.4	%		9.777		11.491		17.5	%
Total Annuities		3.903		3.775		4.087		4.347		4.708		20.6	%		14.491		16.917		16.7	%
Alliance Mutual Funds		0.357		0.533		0.464		0.656		0.437		22.4	%		1.113		2.090		87.8	%
Total Annuity and Alliance Mutual Funds	$	4.259	$	4.308	$	4.550	$	5.003	$	5.145		20.8	%	$	15.604	$	19.007		21.8	%

(1) This schedule combines the previously reported data for LNC and JP and does not reflect any adjustments that may have resulted had the April 4, 2006 merger been completed prior to the periods presented.

12/31/2007																									PAGE 5
Consolidated Expense Detail
Unaudited (In Millions)
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Commissions	$	464.7		$	446.5		$	462.9		$	470.8		$	501.9			8.0	%	$	1,422.2		$	1,882.1			32.3	%
General and administrative expenses:
General and administrative expenses		433.6			391.0			432.4			418.2			432.7			-0.2	%		1,492.1			1,674.2			12.2	%
Merger-related expenses		15.8			10.1			23.8			21.9			23.6			49.4	%		35.3			79.4			124.9	%
Total general and administrative expenses excluding Broker/Dealer		449.4			401.1			456.2			440.1			456.3			1.5	%		1,527.4			1,753.6			14.8	%
Communications expenses		13.3			14.7			15.2			13.2			13.5			1.5	%		41.0			56.5			37.8	%
Restructuring charges		3.3			3.9			6.2			7.4			2.9			-12.1	%		14.2			20.3			43.0	%
Taxes, licenses and fees		47.1			65.2			51.8			52.4			48.6			3.2	%		177.5			218.1			22.9	%
Interest and debt expense (1)		70.4			61.5			72.8			68.8			80.3			14.1	%		224.4			283.5			26.3	%
Total commissions and expenses incurred		1,048.2			992.8			1,065.1			1,052.7			1,103.5			5.3	%		3,406.6			4,214.0			23.7	%
Less: commissions and expenses capitalized		(517.9	)		(487.4	)		(504.9	)		(511.4	)		(554.4	)		-7.0	%		(1,578.4	)		(2,058.1	)		-30.4	%
Amortization:
DAC/VOBA Amortization, net of interest (3)		278.5			281.6			244.5			262.5			240.7			-13.6	%		891.5			1,029.3			15.5	%
Amortization of intangibles		2.6			2.5			2.5			2.6			2.5			-3.8	%		11.8			10.2			-13.6	%
Total amortization		281.1			284.1			247.1			265.1			243.3			-13.4	%		903.3			1,039.5			15.1	%
Broker/Dealer commissions and G&A		80.0			87.2			92.8			91.8			100.5			25.6	%		282.5			372.4			31.8	%
Total	$	891.3		$	876.7		$	900.1		$	898.2		$	892.9			0.2	%	$	3,014.0		$	3,567.8			18.4	%
		(0.0	)		0.0			0.0			0.0			(0.0	)					0.1			(0.0	)
Merger-related expenses:(2)
Severance and employee-related charges	$	6.2		$	3.0		$	6.6		$	5.6		$	6.2			-		$	27.4		$	21.4			-21.9	%
Systems integration and related expenses		5.4			5.6			17.7			17.9			15.1			179.6	%		7.7			56.3		NM
Other expenses		7.5			5.4			5.7			5.8			6.6			-12.0	%		13.8			23.5			70.3	%
Total merger-related expenses	$	19.1		$	14.0		$	30.0		$	29.3		$	27.9			46.1	%	$	48.9		$	101.2			107.0	%

Note:  The Consolidated Expense Detail data is presented on a GAAP basis.

(1) Interest expense for the fourth quarter 2006 includes $5.6 million related to losses on early extinguishment of debt.

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

(3) In the second quarter of 2007, we recognized certain adjustments that reduced DAC amortization by $23 million.

12/31/2007																									PAGE 6
Operating Results Summary
Unaudited [Millions of Dollars, except Common Share Data]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Operating Revenues
Individual Life Insurance (1)	$	958.4		$	971.4		$	957.5		$	990.1		$	1,001.7			4.5	%	$	3,255.8		$	3,920.7			20.4	%
Individual Annuities		637.3			605.1			675.3			666.3			653.6			2.6	%		2,161.2			2,600.3			20.3	%
Individual Markets		1,595.7			1,576.5			1,632.8			1,656.4			1,655.3			3.7	%		5,417.0			6,521.0			20.4	%
Defined Contribution		245.0			246.8			252.1			243.4			243.3			-0.7	%		988.2			985.6			-0.3	%
Executive Benefits		109.1			111.7			114.9			113.5			114.9			5.3	%		371.8			455.0			22.4	%
Group Protection		344.8			360.4			391.0			367.5			380.6			10.4	%		1,031.8			1,499.6			45.3	%
Employer Markets		698.9			718.9			758.0			724.5			738.8			5.7	%		2,391.7			2,940.2			22.9	%
Investment Management		148.9			150.2			151.0			150.1			139.0			-6.6	%		563.5			590.2			4.7	%
Lincoln UK		84.8			90.7			92.5			88.7			98.3			15.9	%		308.0			370.2			20.2	%
Other Operations		74.6			65.1			74.3			63.7			77.8			4.3	%		282.7			281.0			-0.6	%
Total Operating Revenues		2,602.9			2,601.4			2,708.6			2,683.3			2,709.3			4.1	%		8,962.9			10,702.6			19.4	%
Realized gain (loss) on investments and derivatives		12.8			26.4			(8.7	)		(35.4	)		(108.9	)	NM				(6.7	)		(126.5	)	NM
Net gain (loss) on reinsurance
derivative/trading account securities		1.2			(0.2	)		4.0			(1.1	)		(0.8	)	NM				4.1			1.8			-56.1	%
Gain on sale of subsidiaries/ businesses		-			-			-			-			6.2		NM				-			6.2		NM
Amortization of deferred gain on indemnity
reinsurance related to reserve developments		0.3			0.3			7.8			0.6			0.7			133.3	%		1.3			9.4		NM
Total Revenues	$	2,617.2		$	2,628.0		$	2,711.8		$	2,647.4		$	2,606.5			-0.4	%	$	8,961.6		$	10,593.6			18.2	%
		(0.0	)		0.0			(0.0	)		(0.0	)		(0.0	)					(0.0	)		-
Income from Operations (2)
Individual Life Insurance	$	157.4		$	166.6		$	176.4		$	173.6		$	158.8			0.9	%	$	496.3		$	675.4			36.1	%
Individual Annuities		123.8			121.0			130.1			106.9			90.0			-27.3	%		408.6			448.0			9.6	%
Individual Markets		281.1			287.6			306.5			280.5			248.8			-11.5	%		904.8			1,123.4			24.2	%
Defined Contribution		44.6			49.7			47.3			41.2			43.1			-3.4	%		203.9			181.3			-11.1	%
Executive Benefits		12.7			14.4			13.9			11.0			15.0			18.1	%		49.2			54.3			10.4	%
Group Protection		33.2			23.1			29.0			33.2			28.2			-15.1	%		99.0			113.5			14.6	%
Employer Markets		90.5			87.3			90.1			85.5			86.2			-4.8	%		352.1			349.1			-0.9	%
Investment Management		14.4			16.2			11.3			21.8			27.0			87.5	%		55.2			76.4			38.4	%
Lincoln UK		9.9			10.9			11.7			10.3			12.7			28.3	%		38.9			45.6			17.2	%
Other Operations		(30.0	)		(30.6	)		(39.2	)		(51.9	)		(62.4	)	NM				(53.2	)		(184.1	)	NM
Income from Operations  (2)		366.1			371.4			380.5			346.2			312.3			-14.7	%		1,297.7			1,410.5			8.7	%
Realized gain (loss) on investments and derivatives		9.4			17.1			(4.9	)		(23.2	)		(71.3	)	NM				(2.6	)		(82.3	)	NM
Net gain (loss) on reinsurance
derivative/trading account securities		0.1			-			2.1			(0.5	)		(0.3	)	NM				2.0			1.3			-35.0	%
Loss on sale of subsidiaries/ businesses		-			-			-			-			(1.8	)	NM				-			(1.8	)	NM
Reserve development, net of related amortization
on business sold through indemnity reinsurance		0.2			0.2			(7.9	)		0.4			0.4			100.0	%		0.8			(6.9	)	NM
Early extinguishment of debt		(3.6	)		-			-			-			-			100.0	%		(3.6	)		-			100.0	%
Income (loss) from discontinued operations (3)		9.1			7.7			6.3			6.6			(126.8	)	NM				21.3			(106.2	)	NM
Net Income	$	381.3		$	396.5		$	376.0		$	329.6		$	112.5			-70.5	%	$	1,315.6		$	1,214.6			-7.7	%
		(0.0	)		(0.0	)		0.0			(0.0	)		0.1						(0.0	)		0.1
OTHER DATA
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.						Dec.			Dec.
	2006			2007			2007			2007			2007						2006			2007
Shareholders' Equity
Beg of period (including AOCI)	$	12,043.2		$	12,201.0		$	12,032.2		$	11,835.7		$	11,963.0					$	6,384.4		$	12,201.0
End of period (including AOCI)		12,201.0			12,032.2			11,835.7			11,963.0			11,728.7						12,201.0			11,728.7
End of period (excluding AOCI)		11,587.9			11,372.5			11,686.4			11,766.2			11,493.1						11,587.9			11,493.1
Average equity (excluding AOCI) (4)		11,512.0			11,480.2			11,529.4			11,726.3			11,629.6						10,054.0			11,591.4
Common Shares Outstanding
Average for the period - diluted		280.4			279.5			274.4			272.5			269.4						256.2			273.9
End of period - diluted		280.2			274.0			274.5			271.7			266.2						280.2			266.2
Per Share Data (Diluted)
Net income	$	1.36		$	1.42		$	1.37		$	1.21		$	0.42					$	5.13		$	4.43
Income from operations   (2)		1.31			1.33			1.39			1.27			1.16						5.06			5.15
Shareholders' Equity Per Share
Shareholders' Equity (including AOCI)	$	44.21		$	44.42		$	43.57		$	44.41		$	44.36					$	44.21		$	44.36
Shareholders' Equity (excluding AOCI)		41.99			41.98			43.02			43.68			43.46						41.99			43.46
Dividends declared (Common Stock)		0.395			0.395			0.395			0.395			0.415						1.535			1.600
Return on Equity
Net Income/Average Equity		13.2	%		13.8	%		13.0	%		11.2	%		3.9	%					13.1	%		10.5	%
Income from Operations/Average Equity		12.7	%		12.9	%		13.2	%		11.8	%		10.7	%					12.9	%		12.2	%
Market Value of Common Stock
Highest price	$	66.72		$	71.18		$	74.72		$	72.28		$	70.66					$	66.72		$	74.72
Lowest price		61.74			64.29			66.90			54.40			55.84						52.00			54.40
Closing price	$	66.40		$	67.79		$	70.95		$	65.97		$	58.22					$	66.40		$	58.22

(1) In the second quarter of 2007, we recognized certain adjustments that reduced operating revenue by $41 million.  There were reductions to expenses that offset most of this reduction in revenue.

(2) Income from operations includes after-tax restructuring charges of $2.1 million, or 1 cent per share, for the fourth quarter of 2006, $2.5 million, or 1 cent per share, for the first quarter of 2007, $4.0 million, or 1 cent per share, for the second quarter of 2007, $4.8 million, or 2 cents per share, for the third quarter of 2006 and $1.9 million, or 1 cent per share, for the fourthquarter of 2007.  Results for the full year 2007 and 2006 include after-tax restructuring charges of $13.2 million, or 5 cents per share, and $9.3 million, or 4 cents per share, respectively.

(3) Contains discontinued operations and the loss on disposition.  See discontinued operations on page 29 for additional details.

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

12/31/2007																									PAGE 7
Consolidated Statements of Income
Unaudited [Millions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Revenues
Insurance premiums	$	448.1		$	458.9		$	488.9		$	489.1		$	507.7			13.3	%	$	1,406.5		$	1,944.6			38.3	%
Surrender charges		29.9			26.9			28.1			25.6			25.1			-16.1	%		102.5			105.7			3.1	%
Mortality assessments (1)		295.9			311.2			299.6			320.7			328.4			11.0	%		1,031.7			1,259.9			22.1	%
Expense assessments (1)		432.3			441.0			429.9			505.1			512.6			18.6	%		1,469.8			1,888.7			28.5	%
Investment advisory fees		86.1			90.3			92.7			89.0			87.7			1.9	%		327.9			359.7			9.7	%
Net investment income		1,126.3			1,089.5			1,169.8			1,066.4			1,058.3			-6.0	%		3,980.8			4,384.0			10.1	%
Other revenues and fees		165.5			164.9			181.0			168.8			170.8			3.2	%		568.7			685.5			20.5	%
Amortization of deferred gain		18.8			18.6			18.6			18.6			18.6			-1.1	%		75.0			74.5			-0.7	%
Amortization of deferred gain-reserve development		0.3			0.3			7.8			0.6			0.7			133.3	%		1.3			9.4		NM
Realized gain (loss)		13.9			26.2			(4.7	)		(36.6	)		(103.5	)	NM				(2.7	)		(118.4	)	NM
Total Revenues		2,617.2			2,628.0			2,711.8			2,647.4			2,606.5			-0.4	%		8,961.6			10,593.6			18.2	%
		(0.0	)		0.0			(0.0	)		(0.0	)		-						-			-
Benefits and Expenses
Insurance benefits (1)		560.3			588.8			655.8			675.3			778.2			38.9	%		1,911.2			2,698.2			41.2	%
Interest credited to contractholder funds		648.4			604.5			631.0			625.7			593.0			-8.5	%		2,258.5			2,454.1			8.7	%
Operating and acquisition expenses		773.8			750.0			775.4			776.9			764.0			-1.3	%		2,612.1			3,066.3			17.4	%
Taxes, licenses and fees		47.1			65.2			51.8			52.4			48.6			3.2	%		177.5			218.1			22.9	%
Interest and debt expense		70.4			61.5			72.8			68.8			80.3			14.1	%		224.4			283.5			26.3	%
Total Benefits and Expenses		2,100.0			2,070.0			2,186.9			2,199.2			2,264.0			7.8	%		7,183.8			8,720.0			21.4	%
		-			0.0			-			(0.0	)		0.0						-			-
Income from continuing operations before taxes		517.2			558.0			524.9			448.2			342.5			-33.8	%		1,777.8			1,873.6			5.4	%
Federal income taxes		145.0			169.2			155.2			125.2			103.2			-28.8	%		483.6			552.8			14.3	%
Income from continuing operations		372.2			388.8			369.7			323.0			239.3			-35.7	%		1,294.1			1,320.8			2.1	%
Income (loss) from discontinued operations, net of		(0.0	)		(0.0	)		0.0			(0.0	)		0.0						0.1			0.0
federal income taxes (2)		9.1			7.7			6.3			6.6			(126.8	)	NM				21.3			(106.2	)	NM
Net Income	$	381.3		$	396.5		$	376.0		$	329.6		$	112.5			-70.5	%	$	1,315.6		$	1,214.6			-7.7	%
		(0.0	)		(0.0	)		0.0			(0.0	)		0.0						(0.1	)		0.0
Earnings per share
Income from continuing operations	$	1.33		$	1.39		$	1.35		$	1.19		$	0.89			-30.77	%	$	5.05		$	4.82			-5.9	%
Income (loss) from discontinued operations, net of
federal income taxes (2)		0.03			0.03			0.02			0.02			(0.47	)	NM				0.08			(0.39	)	NM
Net income	$	1.36		$	1.42		$	1.37		$	1.21		$	0.42			-71.43	%	$	5.13		$	4.43			-14.23	%
Roll Forward of Deferred Acquisition Costs	Three Months Ended																		Year Ended
& Value of Business Acquired	Dec.			March			June			Sept.			Dec.						Dec.			Dec.
	2006			2007			2007			2007			2007						2006			2007
Balance at beginning of period	$	8,171.6		$	8,420.4		$	8,534.7		$	9,100.6		$	9,337.0					$	5,163.3		$	8,420.4
Cumulative effect of adoption of SOP 05-1		-			(66.1	)		-			-			-						-			(66.1	)
Deferral		517.9			487.4			504.9			511.4			554.4						1,578.4			2,058.1
Amortization net of interest: (1) (3)
Unlocking		10.6			19.6			26.7			0.3			4.6						37.7			51.2
Amortization excluding unlocking		(289.0	)		(301.2	)		(271.3	)		(262.7	)		(245.4	)					(929.3	)		(1,080.6	)
Deferrals, net of amortization included
in operating and acquisition expenses		239.5			205.8			260.4			249.0			313.7						686.8			1,028.8
Adjustment related to realized (gains) losses
on available-for-sale securities		(8.9	)		(17.9	)		(1.6	)		0.2			63.3						(47.6	)		43.9
Adjustment related to unrealized (gains) losses
on available-for-sale securities		(17.4	)		(25.5	)		290.8			(27.9	)		(111.3	)					38.4			126.2
Foreign currency translation adjustment		35.7			4.1			16.3			15.1			(22.9	)					101.5			12.6
Business acquired		-			14.0			-			-			-						2,478.0			14.0
Balance at end of period	$	8,420.4		$	8,534.7		$	9,100.6		$	9,337.0		$	9,579.8					$	8,420.4		$	9,579.8
		0.0			0.0			(0.0	)		0.0			(0.0	)								0.0
Roll Forward of Deferred Front-End Loads
Balance at beginning of period	$	923.9		$	976.9		$	1,017.9		$	1,105.8		$	1,128.1					$	795.7		$	976.9
Cumulative effect of adoption of SOP 05-1		-			(2.0	)		-			-			-						-			(2.0	)
Deferral		77.9			77.2			125.8			97.0			112.4						249.1			412.4
Amortization net of interest: (3)
Unlocking		0.7			1.7			6.9			(30.8	)		(0.4	)					26.4			(22.7	)
Amortization excluding unlocking		(43.5	)		(37.7	)		(52.9	)		(51.3	)		(45.9	)					(144.0	)		(187.8	)
Deferrals, net of amortization included in
expense assessments		35.1			41.1			79.8			14.9			66.1						131.5			201.9
Adjustment related to realized gains
on available-for-sale securities		-			-			(0.1	)		-			-						(0.1	)		(0.1	)
Foreign currency translation adjustment		17.9			2.0			8.1			7.5			(11.2	)					49.9			6.4
Balance at end of period	$	976.9		$	1,017.9		$	1,105.8		$	1,128.1		$	1,183.1					$	976.9		$	1,183.1
		(0.0	)		0.090790			(0.052587	)		0.0			(0.1	)					0.075809			(0.0	)
Roll Forward of Deferred Sales Inducements
Balance at beginning of period	$	173.4		$	193.8		$	206.4		$	225.0		$	249.1					$	129.4		$	193.8
Cumulative effect of adoption of SOP 05-1		-			(2.8	)		-			-			-						-			(2.8	)
Deferral		28.4			23.7			27.4			29.8			35.5						86.1			116.4
Amortization net of interest: (3)
Unlocking		0.9			1.0			0.8			0.9			(0.4	)					4.5			2.4
Amortization excluding unlocking		(8.8	)		(9.3	)		(9.6	)		(6.6	)		(5.2	)					(26.1	)		(30.6	)
Deferrals, net of amortization included in
insurance benefits or interest credited		20.5			15.5			18.7			24.1			30.0						64.5			88.2
Adjustment related to realized gains
on available-for-sale securities		-			(0.1	)		-			-			0.1						(0.1	)		(0.0	)
Balance at end of period	$	193.8		$	206.4		$	225.0		$	249.1		$	279.2					$	193.8		$	279.2
		0.068178			-7.69E-08			0.007477			0.016933			(0.0	)				$	0.0			0.0

(1) In the second quarter of 2007, we recognized certain adjustments that reduced expense assessments by $26 million, reduced mortality assessments by $15 million, increased insurance benefits by $3 million and reduced DAC amortization by $23 million.

(2) Contains discontinued operations and the loss on disposition.  See discontinued operations on page 29 for additional details.

(3) Amortization net of interest has been restated for all periods in order to conform to the current period presentation, which separately breaks out Unlocking and Amortization excluding unlocking.  There was no impact to total Amortization net of interest in prior periods.

12/31/2007																										PAGE 8
Consolidating Statements of Income from Operations
Unaudited [Millions of Dollars]
For the Quarter Ended December 31, 2007
	Individual Markets					Employer Markets
	Life		Annuities			Defined Contribution			Executive Benefits			Group Protection			Investment Management		Lincoln UK			Other Operations			Consolidating Adjustments			Consolidated
Operating Revenues
Insurance premiums	$	89.6	$	46.5		$	-		$	0.0		$	349.7		$	-	$	21.2		$	0.7		$	-		$	507.7
Surrender charges		14.1		9.1			1.8			0.1			-			-		-			-			-			25.1
Mortality assessments		310.3		-			-			9.0			-			-		9.1			-			-			328.4
Expense assessments		112.9		282.7			64.7			5.8			-			-		46.6			(8.1	)		8.1			512.6
Investment advisory fees		-		-			-			-			-			108.0		-			8.1			(28.4	)		87.7
Net investment income		464.1		217.7			173.3			98.6			29.5			-		21.5			54.9			(1.2	)		1,058.3
Amortization of deferred gain		-		-			-			-			-			-		-			18.6			-			18.6
Other revenues and fees		10.7		97.6			3.6			1.3			1.4			31.0		-			38.1			(12.9	)		170.8
Total Operating Revenues		1,001.7		653.6			243.3			114.9			380.6			139.0		98.3			112.3			(34.4	)		2,709.3
		-		(0.0	)		0.0			(0.0	)		(0.0	)		-		(0.0	)		(0.0	)		-			-
Operating Expenses
Insurance benefits		302.2		144.4			-			35.7			252.1			-		36.9			7.0			-			778.2
Interest credited to contractholder funds		260.2		142.2			104.8			51.2			-			-		-			34.6			-			593.0
Operating and acquisition expenses		175.6		249.0			75.2			4.5			78.9			92.8		41.9			79.3			33.1			764.0
Taxes, licenses and fees		23.5		6.1			2.1			1.6			6.2			4.0		-			5.0			-			48.6
Interest and debt expense		-		1.3			-			-			-			-		-			80.3			(1.3	)		80.3
Total Operating Expenses		761.4		542.9			182.1			92.9			337.2			96.8		78.8			206.2			(34.4	)		2,264.0
		0.0		(0.0	)		(0.0	)		0.0			-			-		-			0.0			-			0.0
Income (loss) from Operations before Federal income taxes		240.3		110.7			61.2			22.0			43.4			42.2		19.5			(94.0	)		-			445.3
Federal income taxes		81.5		20.7			18.1			7.0			15.2			15.2		6.8			(31.6	)		-			133.0
Income from Operations	$	158.8	$	90.0		$	43.1		$	15.0		$	28.2		$	27.0	$	12.7		$	(62.4	)	$	-		$	312.3
		0.0		(0.0	)					(0.0	)		(0.0	)							(0.0	)					0.0

12/31/2007																										PAGE 8(B)
Consolidating Statements of Income from Operations
Unaudited [Millions of Dollars]
For the Quarter Ended December 31, 2006
	Individual Markets						Employer Markets
	Life			Annuities			Defined Contribution			Executive Benefits		Group Protection			Investment Management		Lincoln UK			Other Operations			Consolidating Adjustments			Consolidated
Operating Revenues
Insurance premiums	$	93.5		$	10.7		$	-		$	3.3	$	315.9		$	-	$	21.0		$	3.8		$	-		$	448.1
Surrender charges		16.1			12.3			1.5			-		-			-		-			-			-			29.9
Mortality assessments		278.4			-			-			8.5		-			-		9.0			-			-			295.9
Expense assessments		116.4			215.2			58.4			5.5		-			-		36.8			-			-			432.3
Investment advisory fees		-			-			-			-		-			111.2		-			-			(25.2	)		86.1
Net investment income		441.1			314.8			180.6			90.5		28.0			-		18.0			53.8			(0.6	)		1,126.3
Amortization of deferred gain		-			-			-			-		-			-		-			18.8			-			18.8
Other revenues and fees		13.0			84.3			4.5			1.3		0.8			37.7		-			34.2			(10.2	)		165.5
Total Operating Revenues		958.4			637.3			245.0			109.1		344.8			148.9		84.8			110.5			(36.0	)		2,602.9
		-			(0.0	)		0.0			0.0		-			-		(0.0	)		(0.0	)		-
Operating Expenses
Insurance benefits		249.1			9.8			-			39.7		224.0			-		30.4			7.3			-			560.3
Interest credited to contractholder funds		251.3			213.6			104.4			42.0		-			-		-			37.1			-			648.4
Operating and acquisition expenses		192.0			248.0			78.2			7.8		62.8			122.7		39.1			59.2			(35.9	)		773.8
Taxes, licenses and fees		27.0			4.5			1.9			1.3		6.9			3.5		-			2.0			-			47.1
Interest and debt expense		-			0.1			-			-		-			-		-			64.8			(0.1	)		64.8
Total Operating Expenses		719.4			476.0			184.6			90.8		293.6			126.2		69.5			170.4			(36.0	)		2,094.5
		0.0			0.0			(0.0	)		-		-			-		-			(0.0	)		-			(0.0	)
Income (loss) from Operations before Federal income taxes		239.1			161.4			60.4			18.3		51.1			22.7		15.3			(59.9	)		-			508.4
		-			-			-			-		-			-		-			(0.0	)		-
Federal income taxes		81.7			37.6			15.8			5.6		17.9			8.3		5.4			(29.9	)		-			142.4
Income from Operations	$	157.4		$	123.8		$	44.6		$	12.7	$	33.2		$	14.4	$	9.9		$	(30.0	)	$	-		$	366.1
		(0.0	)		0.0			0.0					(0.0	)		0.0					(0.0	)					(0.1	)

12/31/2007																									PAGE 9
Consolidating Statements of Income from Operations
Unaudited [Millions of Dollars]
Year Ended December 31, 2007
	Individual Markets					Employer Markets
	Life		Annuities			Defined Contribution			Executive Benefits			Group Protection			Investment Management		Lincoln UK		Other Operations			Consolidating Adjustments			Consolidated
Operating Revenues
Insurance premiums	$	347.9	$	118.5		$	-		$	1.3		$	1,379.2		$	-	$	95.3	$	2.5		$	-		$	1,944.6
Surrender charges		58.9		38.7			7.8			0.1			-			-		-		0.0			-			105.7
Mortality assessments		1,188.3		-			-			34.5			-			-		37.1		-			-			1,259.9
Expense assessments		434.5		1,023.5			250.9			23.2			-			-		156.6		(21.9	)		21.9			1,888.7
Investment advisory fees		-		-			-			-			-			446.8		-		21.9			(109.0	)		359.7
Net investment income		1,855.8		1,040.3			708.8			390.8			115.3			-		81.1		193.8			(2.0	)		4,384.0
Amortization of deferred gain		-		-			-			-			-			-		-		74.5			-			74.5
Other revenues and fees		35.2		379.3			18.0			5.1			5.0			143.4		0.1		142.9			(43.5	)		685.5
Total Operating Revenues		3,920.7		2,600.3			985.6			455.0			1,499.6			590.2		370.2		413.6			(132.6	)		10,702.6
		-		0.1			-			(0.0	)		(0.1	)		-		0.0		-			-			-
Operating Expenses
Insurance benefits		1,069.6		308.5			-			137.9			999.4			-		137.5		25.4			-			2,678.2
Interest credited to contractholder funds		1,021.0		678.2			418.3			197.2			-			-		-		139.2			-			2,454.1
Operating and acquisition expenses		700.0		997.5			300.5			36.3			291.9			454.5		162.6		253.5			(130.3	)		3,066.3
Taxes, licenses and fees		110.3		26.7			13.8			5.5			33.6			16.0		-		12.1			-			218.1
Interest and debt expense		-		2.2			-			-			-			-		-		283.5			(2.3	)		283.5
Total Operating Expenses		2,900.9		2,013.0			732.6			377.0			1,324.8			470.5		300.1		713.7			(132.6	)		8,700.0
		-		-			(0.0	)		-			-			-		-		0.0			-			-
Income (loss) from Operations before Federal income taxes		1,019.8		587.3			252.9			78.1			174.8			119.7		70.1		(300.0	)		-			2,002.6
		-		-			-			-			-			-		-		(0.0	)		0.0			-
Federal income taxes		344.4		139.2			71.6			23.7			61.3			43.3		24.5		(116.0	)		-			592.1
Income from Operations	$	675.4	$	448.0		$	181.3		$	54.3		$	113.5		$	76.4	$	45.6	$	(184.1	)	$	-		$	1,410.5
		0.0		(0.0	)															0.0						0.0

12/31/2007																		PAGE 9(B)
Consolidating Statements of Income from Operations
Unaudited [Millions of Dollars]
Year Ended December 31, 2006
	Individual Markets				Employer Markets
					Defined		Executive		Group		Investment		Lincoln		Other			Consolidating
	Life		Annuities		Contribution		Benefits		Protection		Management		UK		Operations			Adjustments			Consolidated
Operating Revenues
Insurance premiums	$	321.5	$	47.5	$	-	$	4.7	$	949.0	$	-	$	78.6	$	5.3		$	-		$	1,406.5
Surrender charges		60.3		34.7		7.6		-		-		-		-		-			-			102.5
Mortality assessments		970.2		-		-		27.0		-		-		34.4		-			-			1,031.7
Expense assessments		350.0		755.3		222.6		18.1		-		-		123.5		0.3			-			1,469.8
Investment advisory fees		-		-		-		-		-		424.8		-		-			(96.9	)		327.9
Net investment income		1,510.9		1,038.6		738.4		316.6		80.2		-		71.4		226.4			(1.6	)		3,980.8
Amortization of deferred gain		-		-		-		-		-		-		-		75.0			-			75.0
Other revenues and fees		43.0		285.1		19.6		5.3		2.5		138.7		0.1		104.2			(29.8	)		568.7
Total Operating Revenues		3,255.8		2,161.2		988.2		371.8		1,031.8		563.5		308.0		411.2			(128.4	)		8,962.9
Operating Expenses
Insurance benefits		886.4		97.8		-		138.5		663.3		-		108.2		17.0			-			1,911.2
Interest credited to contractholder funds		882.1		690.8		410.6		131.4		-		-		-		143.7			-			2,258.5
Operating and acquisition expenses		643.2		849.5		288.4		27.5		193.6		465.6		140.1		132.4			(127.8	)		2,612.1
Taxes, licenses and fees		99.1		19.4		9.1		5.0		22.6		13.4		-		9.0			-			177.5
Interest and debt expense		-		0.6		-		-		-		-		-		218.8			(0.6	)		218.8
Total Operating Expenses		2,510.8		1,658.0		708.1		302.3		879.5		478.9		248.3		520.8			(128.4	)		7,178.2
Income (loss) from Operations before Federal income taxes		745.0		503.2		280.1		69.4		152.3		84.6		59.7		(109.6	)		-			1,784.7
Federal income taxes		248.7		94.6		76.2		20.2		53.3		29.4		20.9		(56.4	)		-			486.9
Income from Operations	$	496.3	$	408.6	$	203.9	$	49.2	$	99.0	$	55.2	$	38.9	$	(53.2	)	$	-		$	1,297.7

12/31/2007										PAGE 10
Consolidated Balance Sheets
Unaudited [Millions of Dollars, except Common Share Data]
	Dec.			March			June			Sept.			Dec.
	2006			2007			2007			2007			2007
ASSETS
Investments
Corporate bonds	$	45,489.4		$	45,484.0		$	44,023.4		$	44,089.7		$	44,147.9
U.S. government bonds		263.4			244.3			248.1			239.4			222.0
Foreign government bonds		1,141.6			1,077.1			975.0			1,030.0			1,037.5
Asset and mortgage backed securities		8,691.3			9,186.2			9,946.2			10,479.7			10,604.6
State and municipal bonds		159.4			155.5			158.7			152.1			153.1
Preferred stocks - redeemable		108.3			108.4			95.5			95.3			110.7
Common stocks		525.5			503.8			487.9			499.3			413.9
Preferred stocks-equity		174.7			210.1			198.9			171.0			104.1
Total AFS Securities		56,553.7			56,969.5			56,133.8			56,756.4			56,793.7
Trading securities		3,036.3			2,909.7			2,818.3			2,716.6			2,730.2
Mortgage loans		7,384.3			7,416.0			7,310.8			7,280.7			7,422.7
Real estate		421.3			406.2			387.6			385.0			258.3
Policy loans		2,759.7			2,766.8			2,787.0			2,790.2			2,834.7
Other long-term investments		1,296.1			1,345.5			1,395.1			1,584.0			1,882.1
Total Investments		71,451.3			71,813.6			70,832.5			71,512.9			71,921.6
Cash and invested cash		1,621.6			904.7			989.1			1,327.5			1,665.5
Premiums and fees receivable		356.2			374.9			432.3			401.2			400.6
Accrued investment income		866.2			919.2			861.0			916.5			843.3
Amount recoverable from reinsurers		7,939.1			8,132.1			8,179.1			8,226.7			8,237.4
Deferred acquisition costs and value of business acquired		8,420.4			8,534.7			9,100.6			9,337.0			9,579.8
Goodwill		4,137.1			4,124.8			4,159.0			4,159.3			4,143.7
Other assets		3,168.9			3,375.6			3,599.5			3,432.6			3,531.9
Separate account assets		80,533.7			83,147.5			89,497.2			92,903.1			91,113.3
Total Assets	$	178,494.5		$	181,327.1		$	187,650.1		$	192,216.8		$	191,437.1
LIABILITIES and SHAREHOLDERS' EQUITY
Liabilities
Insurance and Investment Contract Liabilities:
Reserves	$	13,622.1		$	13,864.9		$	13,860.8		$	13,944.9		$	14,308.9
Unpaid claims		1,149.1			1,149.5			1,171.2			1,148.3			1,240.7
Premium deposit funds		20,541.4			20,115.8			20,201.6			19,885.4			19,687.8
Policyholders' funds		38,603.6			38,924.9			39,216.4			39,911.3			40,409.5
Total Insurance and Investment Contract Liabilities		73,916.1			74,055.2			74,450.0			74,889.9			75,646.9
Short-term debt		658.6			493.8			231.0			327.1			550.2
Long-term debt - senior notes		2,231.0			2,483.4			2,382.4			2,682.5			2,892.7
Long-term debt - subordinated
Capital securities		1,072.0			1,570.7			1,570.8			1,570.9			1,570.9
Junior subordinated debentures issued to
affiliated trusts		154.6			154.6			154.6			154.6			154.6
Embedded derivative - modco		228.7			229.8			157.5			191.5			219.5
Deferred gain on indemnity reinsurance		759.6			740.7			734.3			715.1			695.8
Federal income taxes		876.4			1,066.8			829.2			902.5			943.6
Other liabilities		5,862.7			5,352.4			5,807.3			5,916.6			5,920.9
Separate account liabilities		80,533.7			83,147.5			89,497.2			92,903.1			91,113.3
Total Liabilities		166,293.5			169,294.9			175,814.4			180,253.8			179,708.4
Preferred Stock		0.5			0.5			0.5			0.5			0.4
Capital stock		7,450.7			7,318.5			7,362.1			7,308.6			7,200.5
Retained earnings (excl. cumulative effect adjustments)		4,136.7			4,109.8			4,380.1			4,513.4			4,348.4
Cumulative effect of adoption of FIN-48		-			(15.4	)		(15.4	)		(15.4	)		(15.4	)
Cumulative effect of adoption of SOP 05-1		-			(40.9	)		(40.9	)		(40.9	)		(40.9	)
Unrealized gains on investments		492.8			528.1			16.6			17.9			114.0
Gains - derivatives		39.2			46.8			35.5			70.0			25.0
Foreign currency		165.1			168.4			181.4			193.6			174.8
Funded status of employee benefit plans		(84.0	)		(83.6	)		(84.2	)		(84.6	)		(78.2	)
Total Shareholders' Equity		12,201.0			12,032.2			11,835.7			11,963.0			11,728.7
Total Liabilities and Shareholders' Equity	$	178,494.5		$	181,327.1		$	187,650.1		$	192,216.8		$	191,437.1
Shareholders' Equity Per Share	$	44.21		$	44.42		$	43.57		$	44.41		$	44.36
Book Value, Excluding AOCI	$	41.99		$	41.98		$	43.02		$	43.68		$	43.46
Common shares outstanding -assuming conv of
preferreds (in millions)		276.0			270.9			271.6			269.4			264.4

12/31/2007													PAGE 11
Balance Sheet Data - Segment Highlights
Unaudited [Millions of Dollars]
	Individual Markets				Employer Markets
As of December 31, 2007	Annuities		Life		Defined Contribution		Executive Benefits		Group Protection		Investment Management		Lincoln UK		Other Operations(1)				Consolidated
Assets
Allocated Investments	$	18,143.8	$	29,492.1	$	11,528.8	$	6,089.9	$	1,934.5	$	-	$	1,194.7		$	3,537.8		$	71,921.6
DAC and VOBA		2,477.0		5,408.7		513.8		283.0		123.4		-		772.1			1.8			9,579.8
Goodwill		1,045.6		2,201.0		20.2		-		274.3		247.0		16.5			339.2			4,143.7
DSI and other intangibles		278.8		93.0		3.4		-		-		5.4		-			385.7			766.3
Amounts recoverable from reinsurers		744.4		1,943.6		-		4.9		31.3		-		69.8			5,443.5			8,237.4
Separate account assets		58,508.4		4,615.5		17,845.2		1,293.7		-		-		8,850.4			-			91,113.3
Liabilities and Capital
Insurance and Investment Contract Liabilities:
Insurance policy & claim reserves		816.9		5,442.0		-		2,089.2		1,273.0		-		1,146.9			4,781.6			15,549.6
Contractholder funds		17,749.7		25,844.8		10,891.7		3,998.5		17.2		-		402.9			1,192.5			60,097.3
Total Insurance and Inv Contract Liabilities		18,566.6		31,286.8		10,891.7		6,087.7		1,290.2		-		1,549.8			5,974.1			75,646.9
Allocated capital (2)		3,552.7		7,835.8		898.7		537.2		968.3		348.5		361.8			(3,009.9	)		11,493.1
As of December 31, 2006
Assets
Allocated Investments	$	18,686.2	$	27,843.9	$	11,762.6	$	6,088.9	$	1,833.6	$	-	$	1,101.1		$	4,135.1		$	71,451.3
DAC and VOBA		2,050.4		4,659.4		497.6		265.3		137.6		-		809.0			1.3			8,420.4
Goodwill		1,031.6		2,181.3		20.2		-		281.0		261.7		16.2			345.1			4,137.1
DSI and other intangibles		193.7		97.0		0.1		-		-		9.3		-			387.2			687.2
Amounts recoverable from reinsurers		836.9		1,817.7		-		5.3		27.5		-		70.2			5,181.5			7,939.1
Separate accounts assets		48,014.7		4,256.0		17,459.2		1,617.7		-		-		8,756.9			429.2			80,533.7
Liabilities and Capital
Insurance and Investment Contract Liabilities:
Insurance policy & claim reserves		438.1		5,640.7		-		1,778.3		1,183.4		-		1,118.8			4,611.9			14,771.2
Contractholder funds		18,230.4		23,738.0		10,982.9		4,025.5		16.8		-		435.6			1,715.9			59,145.0
Total Insurance and Inv    Contract Liabilities		18,668.5		29,378.6		10,982.9		5,803.8		1,200.2		-		1,554.4			6,327.7			73,916.1
Allocated capital (2)		3,432.5		7,345.1		959.8		531.7		923.1		307.8		385.0			(2,297.1	)		11,587.9

(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).

12/31/2007																						PAGE 12
Individual Markets - Individual Life Insurance
Income Statements & Operational Data
Unaudited [Millions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Operating Revenues
Insurance premiums	$	93.5		$	87.7		$	87.8		$	82.7		$	89.6			-4.2	%	$	321.5		$	347.9			8.2	%
Surrender charges		16.1			15.2			15.7			14.0			14.1			-12.4	%		60.3			58.9			-2.3	%
Mortality assessments (1)		278.4			292.3			282.4			303.3			310.3			11.5	%		970.2			1,188.3			22.5	%
Expense assessments (1)		116.4			111.9			69.9			139.8			112.9			-3.0	%		350.0			434.5			24.1	%
Net investment income		441.1			454.0			493.3			444.5			464.1			5.2	%		1,510.9			1,855.8			22.8	%
Other revenues and fees		13.0			10.2			8.3			6.0			10.7			-17.7	%		43.0			35.2			-18.1	%
Total Operating Revenues		958.4			971.4			957.5			990.1			1,001.7			4.5	%		3,255.8			3,920.7			20.4	%
Operating Expenses
Insurance benefits (1)		249.1			246.0			263.0			258.5			302.2			21.3	%		886.4			1,069.6			20.7	%
Interest credited to contractholder funds		251.3			251.7			254.0			255.1			260.2			3.5	%		882.1			1,021.0			15.7	%
Operating and acquisition expenses		219.0			221.2			171.0			219.0			199.0			-9.1	%		742.3			810.3			9.2	%
Total Operating Expenses		719.4			718.9			688.0			732.6			761.4			5.8	%		2,510.8			2,900.9			15.5	%
Income from operations before Federal income taxes		239.1			252.5			269.4			257.6			240.3			0.5	%		745.0			1,019.8			36.9	%
Federal income taxes		81.7			85.9			93.0			84.0			81.5			-0.2	%		248.7			344.4			38.5	%
Income from Operations	$	157.4		$	166.6		$	176.4		$	173.6		$	158.8			0.9	%	$	496.3		$	675.4			36.1	%
Effective tax rate		34.2	%		34.0	%		34.5	%		32.6	%		33.9	%					33.4	%		33.8	%
Average equity	$	7,292.7		$	7,557.8		$	7,790.5		$	7,911.1		$	7,925.1					$	6,208.6		$	7,796.1
Return on average equity		8.6	%		8.8	%		9.1	%		8.8	%		8.0	%					8.0	%		8.7	%
Operating and Acquisition Expenses
Commissions	$	226.5		$	227.1		$	211.7		$	213.1		$	211.9			-6.4	%	$	611.6		$	863.9			41.3	%
General and administrative expenses		116.3			111.0			115.6			104.6			109.3			-6.1	%		402.3			440.5			9.5	%
Taxes, licenses and fees		27.0			32.9			26.6			27.3			23.5			-13.1	%		99.1			110.3			11.3	%
Total commissions and expenses incurred		369.8			371.1			353.8			345.1			344.7			-6.8	%		1,113.0			1,414.6			27.1	%
Less: commissions and expenses capitalized		(291.3	)		(288.9	)		(272.4	)		(270.5	)		(268.1	)		8.0	%		(807.8	)		(1,099.8	)		-36.1	%
Amortization of DAC and VOBA, net of interest		140.5			139.1			89.6			144.4			122.5			-12.8	%		437.1			495.5			13.4	%
Net Operating and Acquisition Expenses	$	219.0		$	221.2		$	171.0		$	219.0		$	199.0			-9.1	%	$	742.3		$	810.3			9.2	%
General and administrative expenses -
basis points on account values - Annualized		178			166			170			151			156			(22	)		176			161			(15	)
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	4,524.7		$	4,659.4		$	4,795.8		$	5,126.4		$	5,259.6					$	2,543.9		$	4,659.4
Deferral		291.3			288.9			272.4			270.5			268.1						807.8			1,099.8
Amortization net of interest:(1)
Unlocking		2.0			11.3			20.8			(3.8	)		6.1						10.4			34.5
Amortization excluding unlocking		(142.5	)		(150.4	)		(110.5	)		(140.6	)		(128.6	)					(447.4	)		(530.0	)
Deferrals, net of amortization
included in operating and acquisition expenses		150.8			149.8			182.8			126.1			145.6						370.7			604.3
Adjustment related to realized
(gains) losses on available-for-sale securities		(6.7	)		(12.5	)		(2.4	)		0.6			56.1						(21.8	)		41.8
Adjustment related to unrealized
(gains) losses on available-for-sale securities		(9.5	)		(0.9	)		150.2			6.5			(52.7	)					(0.1	)		103.1
Business acquired		-			-			-			-			-						1,766.6			-
Balance at end of period	$	4,659.4		$	4,795.8		$	5,126.4		$	5,259.6		$	5,408.7					$	4,659.4		$	5,408.7
Roll Forward of Deferred Front-End Loads
Balance at beginning of period	$	415.9		$	449.5		$	490.6		$	569.0		$	585.2					$	342.6		$	449.5
Deferral		65.2			65.5			112.4			83.9			98.2						201.6			360.0
Amortization net of interest:
Unlocking		0.1			2.5			7.1			(27.0	)		0.7						8.1			(16.7	)
Amortization excluding unlocking		(31.7	)		(26.9	)		(41.1	)		(40.7	)		(35.4	)					(102.7	)		(144.1	)
Deferrals, net of amortization
included inexpense assessments		33.6			41.0			78.4			16.2			63.5						106.9			199.2
Balance at end of period	$	449.5		$	490.6		$	569.0		$	585.2		$	648.7					$	449.5		$	648.7
(1) In the second quarter of 2007, we recognized certain adjustments that reduced expense assessments by $26 million, reduced mortality assessments by $15 million, increased insurance benefits by $3 million and reduced DAC amortization by $23 million.

12/31/2007																PAGE 13
Individual Markets- Individual Life Insurance
Operational Data
Unaudited [Millions of Dollars]
	Three Months Ended          & #160;													Year Ended
	Dec.		March		June		Sept.		Dec.		%			Dec.		Dec.		%
	2006		2007		2007		2007		2007		Change			2006		2007		Change
Sales by Product (1)
Universal Life
Excluding MoneyGuard	$	177.6	$	166.2	$	145.0	$	143.9	$	141.3		-20.4	%	$	436.2	$	596.3		36.7	%
MoneyGuard		7.8		7.4		9.9		10.9		12.1		55.1	%		31.3		40.2		28.4	%
Total		185.4		173.6		154.9		154.8		153.3		-17.3	%		467.5		636.5		36.1	%
Variable Universal Life		22.1		20.6		17.3		17.7		21.9		-0.9	%		60.8		77.4		27.3	%
Whole life		0.6		0.1		0.1		0.3		0.3		-50.0	%		2.4		0.8		-66.7	%
Term		10.0		9.3		7.8		7.2		6.6		-34.0	%		40.1		30.8		-23.2	%
Total	$	218.1	$	203.5	$	180.0	$	179.9	$	182.1		-16.5	%	$	570.8	$	745.6		30.6	%
First-Year Paid Premiums
Universal Life
Excluding MoneyGuard	$	351.0	$	367.9	$	315.7	$	303.8	$	304.6		-13.2	%	$	989.4	$	1,292.0		30.6	%
MoneyGuard		52.3		49.2		65.9		72.4		80.4		53.7	%		208.6		267.8		28.4	%
Total		403.2		417.1		381.6		376.2		385.0		-4.5	%		1,198.1		1,559.8		30.2	%
Variable Universal Life		53.4		52.5		47.8		46.4		48.9		-8.4	%		155.4		195.5		25.8	%
Whole life		16.5		8.4		10.1		11.8		17.8		7.9	%		46.3		48.1		3.9	%
Term		9.6		9.1		8.2		7.3		6.6		-31.3	%		40.0		31.1		-22.3	%
Total	$	482.7	$	487.0	$	447.7	$	441.6	$	458.2		-5.1	%	$	1,439.8	$	1,834.5		27.4	%
Life Insurance In-Force (Billions)
Universal Life & other	$	267.228	$	272.921	$	276.040	$	279.933	$	284.305		6.4	%	$	267.228	$	284.305		6.4	%
Term Insurance		234.148		235.491		236.155		236.414		235.919		0.8	%		234.148		235.919		0.8	%
Total  Life Segment In-Force	$	501.376	$	508.411	$	512.195	$	516.347	$	520.224		3.8	%	$	501.376	$	520.224		3.8	%

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

12/31/2007																						PAGE 14
Individual Markets - Individual Life Insurance
Account Value Roll Forward
Unaudited [Billions of Dollars]
	Three Months Ended          & #160;																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Interest Sensitive Life-Balance Beginning-of-Period	$	21.516		$	21.890		$	22.228		$	22.517		$	22.818			6.1	%	$	11.809		$	21.890			85.4	%
Business acquired		-			-			-			-			-		NM				9.150			-			-100.0	%
Deposits		0.948			0.882			0.864			0.842			0.935			-1.4	%		2.865			3.523			23.0	%
Withdrawals & deaths		(0.301	)		(0.264	)		(0.311	)		(0.258	)		(0.262	)		13.0	%		(1.075	)		(1.095	)		-1.9	%
Net flows		0.647			0.618			0.553			0.585			0.673			4.0	%		1.790			2.428			35.6	%
Policyholder assessments (6)		(0.516	)		(0.523	)		(0.507	)		(0.527	)		(0.575	)		-11.4	%		(1.705	)		(2.131	)		-25.0	%
Interest credited		0.242			0.243			0.243			0.243			0.246			1.7	%		0.846			0.975			15.2	%
Interest Sensitive Life-Balance End-of-Period (1)	$	21.890		$	22.228		$	22.517		$	22.818		$	23.161			5.8	%	$	21.890		$	23.161			5.8	%
Variable Universal Life-Balance Beginning of Period	$	4.305		$	4.600		$	4.696		$	4.948		$	5.057			17.5	%	$	2.242		$	4.600			105.2	%
Business acquired		-			-			-			-			-		NM				1.918			-			-100.0	%
Deposits		0.153			0.157			0.142			0.137			0.151			-1.3	%		0.499			0.587			17.6	%
Withdrawals & deaths		(0.073	)		(0.077	)		(0.109	)		(0.087	)		(0.079	)	NM				(0.267	)		(0.352	)		-31.8	%
Net flows		0.080			0.080			0.033			0.050			0.072			-10.0	%		0.233			0.235			0.9	%
Policyholder assessments		(0.079	)		(0.079	)		(0.080	)		(0.080	)		(0.082	)		-3.8	%		(0.276	)		(0.320	)		-15.9	%
Investment income and change in market value		0.294			0.095			0.299			0.139			(0.087	)	NM				0.483			0.446			-7.7	%
Variable Universal Life -Balance End-of-Period	$	4.600		$	4.696		$	4.948		$	5.057		$	4.961			7.8	%	$	4.600		$	4.961			7.8	%
Total Segment- Life Insurance Account Value Roll Forward
Balance Beginning-of-Period	$	25.821		$	26.490		$	26.924		$	27.465		$	27.875			8.0	%	$	14.051		$	26.490			88.5	%
Business acquired		-			-			-			-			-		NM				11.068			-			-100.0	%
Deposits		1.101			1.039			1.005			0.980			1.086			-1.4	%		3.365			4.110			22.1	%
Withdrawals & deaths		(0.374	)		(0.341	)		(0.420	)		(0.345	)		(0.341	)		8.8	%		(1.342	)		(1.447	)		-7.8	%
Net flows		0.727			0.698			0.586			0.635			0.745			2.5	%		2.023			2.663			31.6	%
Policyholder assessments (6)		(0.595	)		(0.602	)		(0.586	)		(0.607	)		(0.657	)		-10.4	%		(1.980	)		(2.452	)		-23.8	%
Investment income and change in market value		0.536			0.338			0.542			0.382			0.159			-70.3	%		1.329			1.421			6.9	%
Total Segment -Balance End-of-Period	$	26.490		$	26.924		$	27.465		$	27.875		$	28.122			6.2	%	$	26.490		$	28.122			6.2	%
Life Product Spread Information (2)
																Change									Change
Interest Sensitive Products																(Basis Points)									(Basis Points)
Net investment income (3) (4) (5)		6.44	%		6.48	%		6.99	%		6.09	%		6.30	%		(14	)		6.34	%		6.47	%		13
Interest credited to policyholders		4.52	%		4.46	%		4.45	%		4.41	%		4.41	%		(11	)		4.50	%		4.43	%		(7	)
Spread (3) (4)		1.92	%		2.02	%		2.54	%		1.68	%		1.89	%		(3	)		1.84	%		2.04	%		20
Traditional Products
Net investment income (3)		6.51	%		6.41	%		6.48	%		6.18	%		6.23	%		(28	)		6.61	%		6.32	%		(29	)

(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.  We exclude net investment income earned on investments supporting statutory surplus from our spread calculations.  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 December 31, 2007, 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 16 bps in the 4th quarter of 2007, 9 bps in the 3rd quarter of 2007, 22 bps in the 2nd quarter of 2007, 21 bps in the 1st quarter of 2007 and 12 bps in the 4th quarter of 2006.  There was an impact on traditional products of 2 bps in the 4th quarter of 2007, 9 bps in the 3rd quarter of 2007, 14 bps in the 2nd quarter of 2007 and 2 bps in the 1st quarter of 2007, 2 bps in the 4th quarter of 2006.

(4) The net investment income and spread above include earnings from alternative investments, such as limited partnerships.  The impact of these investments on investment income yields for interest senstive products was 5 bps in the 4th quarter of 2007, -4 bps in the 3rd quarter of 2007, 70 bps in the 2nd quarter of 2007, 14 bps in the 1st quarter of 2007 and 24 bps in the 4th quarter of 2006.  The impact of these investments on traditional products was -1 bp in the 4th quarter of 2007 and -6 bps in the 3rd quarter of 2007.

(5) The net investment income and spread above is partially offset by amortization associated with prepayment fee income.  The impact of this offset was 1 bp in the 4th quarter of 2007, -0- bps in the 3rd quarter of 2007 and 8 bps in the 2nd quarter of 2007.

(6) Interest sensitive policyholder assessments in the second quarter of 2007 includes +.017 related to certain adjustments.

12/31/2007																						PAGE 15
Individual Markets - Individual Annuities
Income Statements & Operational Data
Unaudited [Millions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Operating Revenues
Insurance premiums	$	10.7		$	12.8		$	16.6		$	42.6		$	46.5		NM			$	47.5		$	118.5			149.6	%
Surrender charges		12.3			9.7			10.1			9.8			9.1			-26.0	%		34.7			38.7			11.6	%
Expense assessments		215.2			226.0			249.9			264.9			282.7			31.4	%		755.3			1,023.5			35.5	%
Net investment income		314.8			266.3			302.2			254.1			217.7			-30.8	%		1,038.6			1,040.3			0.2	%
Other revenues and fees (1)		84.3			90.4			96.4			94.9			97.6			15.8	%		285.1			379.3			33.0	%
Total Operating Revenues		637.3			605.1			675.3			666.3			653.6			2.6	%		2,161.2			2,600.3			20.3	%
Operating Expenses
Insurance benefits		9.8			21.4			31.8			110.9			144.4		NM				97.8			308.5			215.4	%
Interest credited to contractholder funds		213.6			166.5			189.9			179.6			142.2			-33.4	%		690.8			678.2			-1.8	%
Operating and acquisition expenses		252.6			256.7			278.4			235.0			256.4			1.5	%		869.4			1,026.4			18.1	%
Total Operating Expenses		476.0			444.6			500.0			525.5			542.9			14.1	%		1,658.0			2,013.0			21.4	%
Income from operations before Federal income taxes		161.4			160.5			175.3			140.7			110.7			-31.4	%		503.2			587.3			16.7	%
Federal income taxes		37.6			39.5			45.2			33.8			20.7			-44.9	%		94.6			139.2			47.1	%
Income from Operations	$	123.8		$	121.0		$	130.1		$	106.9		$	90.0			-27.3	%	$	408.6		$	448.0			9.7	%
Effective tax rate		23.3	%		24.6	%		25.8	%		24.0	%		18.7	%					18.8	%		23.7	%
Average equity	$	3,388.1		$	3,442.3		$	3,491.1		$	3,537.8		$	3,549.1					$	2,927.9		$	3,505.1
Return on average equity		14.6	%		14.1	%		14.9	%		12.1	%		10.1	%					14.0	%		12.8	%
Income from Operations - basis points on
average account values		76			72			73			58			47						69			62
Operating and Acquisition Expenses
Commissions	$	167.2		$	152.1		$	178.8		$	188.9		$	212.3			27.0	%	$	565.1		$	732.1			29.6	%
General and administrative expenses		80.9			69.5			82.4			81.4			98.0			21.1	%		298.8			331.3			10.9	%
Broker-dealer commissions and general and
administrative expenses		80.0			87.2			92.8			91.8			100.5			25.6	%		282.5			372.4			31.8	%
Taxes, licenses and fees		4.5			8.9			5.7			6.0			6.1			35.6	%		19.4			26.7			37.6	%
Total commissions and expenses incurred		332.6			317.7			359.7			368.2			416.8			25.3	%		1,165.7			1,462.4			25.5	%
Less: commissions and expenses capitalized		(181.8	)		(157.6	)		(189.3	)		(196.1	)		(230.5	)		-26.8	%		(612.0	)		(773.5	)		-26.4	%
Amortization of DAC and VOBA, net of interest		101.7			96.6			108.0			62.9			70.0			-31.2	%		315.8			337.5			6.9	%
Net Operating and Acquisition Expenses	$	252.6		$	256.7		$	278.4		$	235.0		$	256.4			1.5	%	$	869.4		$	1,026.4			18.1	%
										$	-			-						-			-
General and administrative expenses - basis
points on gross account values - Annualized (2)		50			41			46			44			51			1			50			46			(4	)
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	1,974.1		$	2,050.4		$	2,082.0		$	2,236.8		$	2,347.4					$	1,328.0		$	2,050.4
Cumulative effect of adoption of SOP 05-1		-			(27.2	)		-			-			-						-			(27.2	)
Deferral		181.8			157.6			189.3			196.1			230.5						612.0			773.5
Amortization net of interest
Unlocking		8.0			10.8			10.3			11.4			(1.8	)					23.2			30.7
Excluding unlocking		(109.8	)		(107.4	)		(118.3	)		(74.3	)		(68.2	)					(339.0	)		(368.2	)
Deferrals, net of amortization included in
operating and acquisition expenses		80.0			61.0			81.4			133.2			160.5						296.3			436.0
Adjustment related to realized (gains) losses
on available-for-sale securities		(1.1	)		(2.2	)		1.0			0.2			2.5						(10.3	)		1.6
Adjustment related to unrealized (gains) losses
on available-for-sale securities		(2.7	)		(14.0	)		72.4			(22.8	)		(33.5	)					(16.2	)		2.2
Business acquired		-			14.0			-			-			-						452.7			14.0
Balance at end of period	$	2,050.4		$	2,082.0		$	2,236.8		$	2,347.4		$	2,477.0					$	2,050.4		$	2,477.0
Roll Forward of Deferred Front-End Loads
Balance at beginning of period	$	94.6		$	100.9		$	104.6		$	111.9		$	122.0					$	72.0		$	100.9
Cumulative effect of adoption of SOP 05-1		-			(2.0	)		-			-			-						-			(2.0	)
Deferral		10.6			9.8			11.8			11.5			11.9						39.7			45.0
Amortization net of interest:
Unlocking		0.5			0.5			0.2			1.4			(0.4	)					4.6			1.8
Amortization excluding unlocking		(4.7	)		(4.4	)		(4.7	)		(2.8	)		(2.7	)					(15.2	)		(14.6	)
Deferrals, net of amortization included in
expense assessments		6.3			5.9			7.3			10.1			8.9						29.0			32.2
Adjustment related to realized gains
on available-for-sale securities		-			-			(0.1	)		-			-						(0.1	)		(0.1	)
Balance at end of period	$	100.9		$	104.6		$	111.9		$	122.0		$	130.9					$	100.9		$	130.9
Roll Forward of Deferred Sales Inducements
Balance at beginning of period	$	173.4		$	193.7		$	206.2		$	224.7		$	248.7					$	129.4		$	193.7
Cumulative effect of adoption of SOP 05-1		-			(2.8	)		-			-			-						-			(2.8	)
Deferral		28.2			23.7			27.3			29.7			35.5						86.0			116.1
Amortization net of interest:
Unlocking		0.9			1.0			0.8			0.9			(0.4	)					4.5			2.4
Amortization excluding unlocking		(8.8	)		(9.3	)		(9.6	)		(6.6	)		(5.2	)					(26.1	)		(30.6	)
Deferrals, net of amortization included in
insurance benefits or interest credited		20.3			15.4			18.5			24.0			30.0						64.4			87.9
Adjustment related to realized gains
on available-for-sale securities		-			(0.1	)		(0.0	)		(0.0	)		0.1						(0.1	)		(0.1	)
Balance at end of period	$	193.7		$	206.2		$	224.7		$	248.7		$	278.8					$	193.7		$	278.8
(1)  Primarily broker-dealer revenue.
(2)  Includes distribution costs.

 

12/31/2007																						PAGE 16
Individual Markets - Individual Annuities
Account Value Roll Forward
Unaudited [Billions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Fixed Annuities - Balance at Beginning of Period	$	18.939		$	18.545		$	18.139		$	17.867		$	17.813			-5.9	%	$	10.840		$	18.545			71.1	%
Business acquired		-			0.040			-			-			-		NM				9.343			0.040			-99.6	%
Gross deposits		1.100			0.821			0.982			1.231			1.288			17.1	%		3.505			4.321			23.3	%
Withdrawals & deaths		(1.162	)		(0.887	)		(0.892	)		(0.891	)		(0.706	)		39.2	%		(4.011	)		(3.377	)		15.8	%
Net flows		(0.062	)		(0.066	)		0.090			0.340			0.582		NM				(0.506	)		0.945			286.8	%
Transfer from (to) variable annuities		(0.561	)		(0.557	)		(0.560	)		(0.589	)		(0.734	)		-30.8	%		(1.891	)		(2.441	)		-29.1	%
Interest credited		0.201			0.153			0.172			0.166			0.125			-37.8	%		0.674			0.616			-8.6	%
Sales inducements deferred		0.028			0.024			0.027			0.030			0.035			25.0	%		0.086			0.116			34.9	%
Fixed Annuities - Gross		18.545			18.139			17.867			17.813			17.822			-3.9	%		18.545			17.822			-3.9	%
Reinsurance ceded		(1.812	)		(1.689	)		(1.598	)		(1.430	)		(1.352	)		25.4	%		(1.812	)		(1.352	)		25.4	%
Fixed Annuities - Balance at End of Period (1)	$	16.733		$	16.449		$	16.270		$	16.383		$	16.470			-1.6	%	$	16.733		$	16.470			-1.6	%
Variable Annuities - Balance at Beginning of Period	$	43.977		$	48.169		$	50.300		$	55.171		$	58.293			32.6	%	$	37.655		$	48.169			27.9	%
Business acquired		-			-			-			-			-		NM				0.250			-			-100.0	%
Deposits		2.061			2.000			2.295			2.247			2.593			25.8	%		7.251			9.135			26.0	%
Withdrawals & deaths		(1.107	)		(1.179	)		(1.247	)		(1.296	)		(1.367	)		-23.5	%		(4.080	)		(5.089	)		-24.7	%
Net flows		0.954			0.821			1.048			0.951			1.226			28.5	%		3.171			4.047			27.6	%
Transfer from (to) fixed annuities		0.560			0.556			0.560			0.589			0.734			31.1	%		1.890			2.440			29.1	%
Investment increase & change in market value		2.678			0.754			3.263			1.582			(1.611	)	NM				5.203			3.988			-23.4	%
Variable Annuities - Balance at End of Period (2)	$	48.169		$	50.300		$	55.171		$	58.293		$	58.643			21.7	%	$	48.169		$	58.643			21.7	%
Total Annuities - Balance at Beginning of Period	$	62.916		$	66.714		$	68.438		$	73.038		$	76.106			21.0	%	$	48.495		$	66.714			37.6	%
Business acquired		-			0.040			-			-			-		NM				9.593			0.040			-99.6	%
Gross deposits		3.161			2.821			3.277			3.478			3.880			22.7	%		10.756			13.457			25.1	%
Withdrawals & deaths		(2.269	)		(2.067	)		(2.139	)		(2.187	)		(2.072	)		8.7	%		(8.091	)		(8.466	)		-4.6	%
Net flows		0.892			0.754			1.138			1.291			1.808			102.7	%		2.665			4.991			87.3	%
Transfers		(0.001	)		(0.001	)		-			-			-			100.0	%		(0.001	)		(0.001	)		0.0	%
Interest credited & change in market value		2.879			0.907			3.435			1.748			(1.485	)	NM				5.876			4.604			-21.6	%
Sales inducements deferred		0.028			0.024			0.027			0.030			0.035			25.0	%		0.086			0.116			34.9	%
Total Annuities - Gross		66.714			68.438			73.038			76.106			76.464			14.6	%		66.714			76.464			14.6	%
Reinsurance ceded		(1.812	)		(1.689	)		(1.598	)		(1.430	)		(1.352	)		25.4	%		(1.812	)		(1.352	)		25.4	%
Total Annuities (Net of Ceded) - Balance at End of Period	$	64.902		$	66.749		$	71.441		$	74.676		$	75.113			15.7	%	$	64.902		$	75.113			15.7	%
Variable Annuities Under Agreement - Included above	$	0.170		$	0.163		$	0.164		$	0.161		$	0.149			-12.4	%	$	0.170		$	0.149			-12.4	%
Incremental Deposits (3):
Fixed annuities	$	1.086		$	0.815		$	0.976		$	1.224		$	1.282			18.0	%	$	3.466		$	4.297			24.0	%
Variable annuities		2.036			1.979			2.265			2.217			2.558			25.6	%		7.159			9.019			26.0	%
Total Incremental Deposits	$	3.122		$	2.794		$	3.241		$	3.441		$	3.840			23.0	%	$	10.625		$	13.316			25.3	%
(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.

 

12/31/2007																						PAGE 17
Individual Markets - Individual Annuities Account Values Unaudited [Billions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.				Dec.			%
	2006			2007			2007			2007			2007			Change			2006				2007			Change
Fixed Annuities - excluding fixed portion of variable contracts
Deposits	$	0.280		$	0.126		$	0.129		$	0.286		$	0.231			-17.5	%	$	0.697			$	0.772			10.8	%
Withdrawals		(0.943	)		(0.674	)		(0.677	)		(0.651	)		(0.486	)		48.5	%		(3.140	)			(2.488	)		20.8	%
Net flows	$	(0.663	)	$	(0.548	)	$	(0.548	)	$	(0.365	)	$	(0.255	)		61.5	%	$	(2.443	)		$	(1.716	)		29.8	%
Gross fixed contract account values	$	11.221		$	10.818		$	10.377		$	10.115		$	9.960			-11.2	%	$	11.221			$	9.960			-11.2	%
Reinsurance ceded		(1.812	)		(1.689	)		(1.598	)		(1.430	)		(1.352	)		25.4	%		(1.812	)			(1.352	)		25.4	%
Net Fixed Contract Account Values	$	9.409		$	9.129		$	8.779		$	8.684		$	8.609			-8.5	%	$	9.409			$	8.609			-8.5	%
Indexed Annuities
Deposits	$	0.245		$	0.160		$	0.191		$	0.199		$	0.204			-16.7	%	$	0.717			$	0.755			5.3	%
Withdrawals		(0.061	)		(0.063	)		(0.061	)		(0.059	)		(0.062	)		-1.6	%		(0.175	)			(0.244	)		-39.4	%
Net flows	$	0.184		$	0.098		$	0.130		$	0.140		$	0.143			-22.3	%	$	0.542			$	0.511			-5.7	%
Indexed Annuity Account Values	$	3.711		$	3.844		$	4.033		$	4.228		$	4.392			18.4	%	$	3.711			$	4.392			18.4	%
Fixed Portion of Variable Contracts
Deposits	$	0.575		$	0.535		$	0.662		$	0.746		$	0.853			48.3	%	$	2.090			$	2.795			33.7	%
Withdrawals		(0.158	)		(0.151	)		(0.154	)		(0.181	)		(0.158	)		-			(0.697	)			(0.645	)		7.5	%
Net flows	$	0.417		$	0.384		$	0.508		$	0.564		$	0.695			66.7	%	$	1.394			$	2.150			54.2	%
Fixed Portion of Variable Contract Account Values	$	3.613		$	3.476		$	3.458		$	3.470		$	3.470			-4.0	%	$	3.613			$	3.470			-4.0	%
Variable Annuities - including fixed portion of variable contracts
Deposits	$	2.635		$	2.535		$	2.957		$	2.993		$	3.445			30.7	%	$	9.342			$	11.931			27.7	%
Withdrawals		(1.265	)		(1.330	)		(1.401	)		(1.477	)		(1.525	)		-20.6	%		(4.777	)			(5.734	)		-20.0	%
Net Flows	$	1.371		$	1.205		$	1.556		$	1.516		$	1.921			40.1	%	$	4.565			$	6.196			35.7	%
Variable Contract Account Values	$	51.782		$	53.776		$	58.629		$	61.764		$	62.112			19.9	%	$	51.782			$	62.112			19.9	%
Average Daily Variable Annuity Account Values	$	46.514		$	49.284		$	53.465		$	55.827		$	58.628			26.0	%	$	42.359			$	54.210			28.0	%
Individual Annuity Product Spread Information																Change										Change
																(Basis Point)										(Basis Point)
Net investment income (1) (2)		5.91	%		5.86	%		5.86	%		5.76	%		5.86	%		(5	)		5.80	%			5.83	%		3
Interest credited to policyholders (3) (4)		3.66	%		3.73	%		3.50	%		4.07	%		4.11	%		45			3.84	%			3.85	%		1
Spread   (1) (2) (4)		2.25	%		2.13	%		2.36	%		1.69	%		1.75	%		(50	)		1.96	%			1.98	%		2

(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.  We exclude net investment income earned on investments supporting statutory surplus from our spread calculations.  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.  We exclude the results of our indexed annuity hedge program from our calculation of spreads, the impact of which affects net investment income and interest credited in  approximately equal and offsetting amounts.

(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 9 bps in the 4th quarter of 2007, 3 bps in the 3rd quarter of 2007, 8 bps in the 2nd quarter of 2007, 5 bps in the 1st quarter of 2007 and 8 bps in the 4th quarter of 2006.  The impact was 8 bps and 6 bps for the year ended December 31, 2007 and 2006, respectively.

(3) The 2007 spreads reflect a correction (a decrease) to interest credited to policyholders related to a correction to the opening balance sheet of JP that was finalized in the first quarter of 2007.  The impact of this correction was 9 bps in the first quarter of 2007 and 2 bps for the year ended December 31, 2007.

(4) Interest credited and our spreads include the impact of changes in the fair value of the SFAS 133 forward starting option liability related to our indexed annuity products.  The impact of these changes in fair value on our spreads was (34) bps in the fourth quarter of 2007, (31) bps in the third quarter of 2007, 24 bps in the second quarter of 2007, (10) bps in the first quarter of 2007 and 10 bps in the fourth quarter of 2006.  The impact was (13) bps and (2) bps for the years ended December 31, 2007 and 2006, respectively.

 

12/31/2007																						PAGE 18
Employer Markets - Defined Contribution
Income Statements & Operational Data
Unaudited [Millions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Operating Revenues
Surrender charges	$	1.5		$	2.0		$	2.2		$	1.8		$	1.8			20.0	%	$	7.6		$	7.8			2.6	%
Expense assessments		58.4			59.8			63.0			63.5			64.7			10.8	%		222.6			250.9			12.7	%
Net investment income		180.6			180.3			182.3			172.9			173.3			-4.0	%		738.4			708.8			-4.0	%
Other revenues and fees		4.5			4.7			4.6			5.2			3.6			-20.0	%		19.6			18.0			-8.2	%
Total Operating Revenues		245.0			246.8			252.1			243.4			243.3			-0.7	%		988.2			985.6			-0.3	%
Operating Expenses
Interest credited to contractholder funds		104.4			104.3			104.6			104.6			104.8			0.4	%		410.6			418.3			1.9	%
Operating and acquisition expenses		80.2			71.6			80.6			84.7			77.3			-3.6	%		297.5			314.3			5.6	%
Total Operating Expenses		184.6			176.0			185.3			189.3			182.1			-1.4	%		708.1			732.6			3.5	%
Income from operations before Federal income taxes		60.4			70.8			66.8			54.1			61.2			1.3	%		280.1			252.9			-9.7	%
Federal income taxes		15.8			21.1			19.5			12.9			18.1			14.6	%		76.2			71.6			-6.0	%
Income from Operations	$	44.6		$	49.7		$	47.3		$	41.2		$	43.1			-3.4	%	$	203.9		$	181.3			-11.1	%
Effective tax rate		26.2	%		29.8	%		29.2	%		23.8	%		29.6	%					27.2	%		28.3	%
Average equity	$	954.9		$	938.5		$	906.6		$	901.4		$	902.7					$	973.1		$	912.3
Return on average equity		18.7	%		21.2	%		20.9	%		18.3	%		19.1	%					21.0	%		19.9	%
Income from Operations - basis points on
average account values		54			58			53			46			47						64			51
Operating and Acquisition Expenses
Commissions	$	20.8		$	19.3		$	21.3		$	19.9		$	20.3			-2.4	%	$	92.6		$	80.8			-12.7	%
General and administrative expenses		56.5			49.9			54.9			59.8			53.7			-5.0	%		209.8			218.2			4.0	%
Taxes, licenses and fees		1.9			5.1			4.4			2.2			2.1		NM				9.1			13.8			51.6	%
Total commissions and expenses incurred		79.2			74.2			80.6			81.9			76.1			-3.9	%		311.4			312.9			0.5	%
Less: commissions and expenses capitalized		(18.5	)		(22.2	)		(22.5	)		(23.7	)		(23.7	)		-28.1	%		(88.1	)		(92.0	)		-4.4	%
Amortization of DAC and VOBA, net of interest		19.4			19.6			22.5			26.5			24.9			28.4	%		74.1			93.4			26.0	%
Net Operating and Acquisition Expenses	$	80.2		$	71.6		$	80.6		$	84.7		$	77.3			-3.6	%	$	297.5		$	314.3			5.6	%
General and administrative expenses - basis
points on account values - Annualized (1)		68			59			62			67			59			(9	)		66			62			(4	)
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	503.8		$	497.6		$	489.4		$	541.9		$	531.8					$	454.9		$	497.6
Cumulative effect of adoption of SOP 05-1		-			(1.4	)		-			-			-						-			(1.4	)
Deferral		18.5			22.2			22.5			23.7			23.7						88.1			92.0
Amortization net of interest:
Unlocking		0.8			(0.5	)		(2.0	)		(5.0	)		(1.2	)					1.3			(8.7	)
Amortization excluding unlocking		(20.1	)		(19.0	)		(20.5	)		(21.5	)		(23.7	)					(75.4	)		(84.7	)
Deferrals, net of amortization included in
operating and acquisition expenses		(0.9	)		2.6			(0.0	)		(2.8	)		(1.2	)					13.9			(1.4	)
Adjustment related to realized gains
on available-for-sale securities		(0.2	)		(2.1	)		(0.8	)		(0.6	)		3.4						(12.8	)		(0.1	)
Adjustment related to unrealized (gains) losses
on available-for-sale securities		(5.1	)		(7.2	)		53.3			(6.8	)		(20.2	)					41.5			19.2
Balance at end of period	$	497.6		$	489.4		$	541.9		$	531.8		$	513.8					$	497.6		$	513.8
(1)  Includes distribution costs.

12/31/2007																									PAGE 19
Employer Markets - Defined Contribution Account Value Roll Forward Unaudited [Billions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Fixed Annuities - Balance at Beginning of Period	$	11.061		$	11.006		$	10.993		$	10.940		$	10.891			-1.5	%	$	11.009		$	11.006			-
Gross deposits (1)		0.183			0.299			0.233			0.305			0.268			46.4	%		0.946			1.105			16.7	%
Withdrawals & deaths		(0.340	)		(0.399	)		(0.376	)		(0.450	)		(0.411	)		-20.9	%		(1.439	)		(1.635	)		-13.6	%
Net flows		(0.157	)		(0.101	)		(0.143	)		(0.144	)		(0.143	)		8.9	%		(0.493	)		(0.531	)		-7.6	%
Transfer from (to) variable annuities		(0.011	)		(0.017	)		(0.012	)		(0.011	)		0.031		NM				0.082			(0.008	)	NM
Interest credited		0.112			0.104			0.102			0.106			0.111			-0.9	%		0.408			0.422			3.4	%
Fixed Annuities - Balance at End of Period (2)	$	11.006		$	10.993		$	10.940		$	10.891		$	10.889			-1.1	%	$	11.006		$	10.889			-1.1	%
			��
Variable Annuities - Balance at Beginning of Period	$	16.530		$	17.475		$	17.676		$	18.480		$	18.581			12.4	%	$	15.692		$	17.475			11.4	%
Gross deposits (1)		0.559			0.655			0.577			0.564			0.560			0.2	%		2.525			2.355			-6.7	%
Withdrawals & deaths		(0.669	)		(0.813	)		(0.747	)		(0.810	)		(0.842	)		-25.9	%		(2.557	)		(3.212	)		-25.6	%
Net flows		(0.110	)		(0.158	)		(0.170	)		(0.247	)		(0.283	)	NM				(0.032	)		(0.857	)	NM
Transfer from (to) fixed annuities		0.008			0.004			0.007			(0.028	)		(0.012	)	NM				(0.084	)		(0.029	)		65.1	%
Investment increase & change in market value		1.047			0.354			0.968			0.375			(0.410	)	NM				1.899			1.287			-32.2	%
Variable Annuities - Balance at End of Period (3)	$	17.475		$	17.676		$	18.480		$	18.581		$	17.876			2.3	%	$	17.475		$	17.876			2.3	%
Total Annuities - Balance at Beginning of Period	$	27.591		$	28.482		$	28.669		$	29.421		$	29.471			6.8	%	$	26.701		$	28.482			6.7	%
Gross Deposits (1)		0.742			0.953			0.809			0.869			0.828			11.6	%		3.471			3.460			-0.3	%
Withdrawals & deaths		(1.009	)		(1.212	)		(1.122	)		(1.260	)		(1.253	)		-24.2	%		(3.996	)		(4.848	)		-21.3	%
Net flows		(0.267	)		(0.259	)		(0.313	)		(0.391	)		(0.426	)		-59.6	%		(0.525	)		(1.388	)	NM
Transfers		(0.002	)		(0.012	)		(0.005	)		(0.039	)		0.019		NM				(0.002	)		(0.038	)	NM
Interest credited & change in market value		1.160			0.458			1.070			0.481			(0.300	)	NM				2.307			1.709			-25.9	%
Total Annuities - Balance at End of Period	$	28.482		$	28.669		$	29.421		$	29.471		$	28.765			1.0	%	$	28.482		$	28.765			1.0	%
Alliance Mutual Funds - Balance at Beginning of Period	$	4.636		$	5.175		$	5.807		$	6.543		$	7.165			54.6	%	$	3.772		$	5.175			37.2	%
Plan/Participant Rollovers		0.168			0.279			0.217			0.411			0.168			0.0	%		0.371			1.075			190.0	%
Additional contributions		0.189			0.254			0.247			0.245			0.269			42.3	%		0.743			1.016			36.7	%
Gross deposits		0.357			0.533			0.464			0.656			0.437			22.4	%		1.113			2.090			87.8	%
Withdrawals & deaths		(0.079	)		(0.054	)		(0.077	)		(0.132	)		(0.102	)		-29.1	%		(0.247	)		(0.365	)		-48.0	%
Net flows		0.277			0.480			0.387			0.524			0.335			20.9	%		0.866			1.725			99.1	%
Transfers		0.003			0.005			0.040			(0.013	)		(0.023	)	NM				(0.007	)		0.009		NM
Interest credited & change in market value		0.259			0.147			0.310			0.111			(0.184	)	NM				0.543			0.384			-29.3	%
Total Alliance Mutual Funds - Balance at End of Period (4)	$	5.175		$	5.807		$	6.543		$	7.165		$	7.293			40.9	%	$	5.175		$	7.293			40.9	%
Total Defined Contribution Segment Account Value
including Alliance Mutual Funds -
Balance at Beginning of Period	$	32.227		$	33.656		$	34.475		$	35.964		$	36.636			13.7	%	$	30.473		$	33.656			10.4	%
Gross deposits (1)		1.099			1.487			1.273			1.525			1.265			15.1	%		4.585			5.550			21.1	%
Withdrawals & deaths		(1.089	)		(1.266	)		(1.199	)		(1.392	)		(1.356	)		-24.5	%		(4.243	)		(5.213	)		-22.9	%
Net flows		0.010			0.221			0.074			0.133			(0.091	)	NM				0.342			0.337			-1.4	%
Transfers		0.000			(0.007	)		0.035			(0.052	)		(0.004	)	NM				(0.009	)		(0.028	)	NM
Interest credited & change in market value		1.419			0.606			1.379			0.592			(0.484	)	NM				2.850			2.093			-26.6	%
Total Defined Contribution Segment Account
Values-Balance at End of Period	$	33.656		$	34.475		$	35.964		$	36.636		$	36.058			7.1	%	$	33.656		$	36.058			7.1	%
Variable Annuities Under Agreement - Included above		0.017			0.016			0.017			0.018			0.017			0.0	%		0.017			0.017			0.0	%
Incremental Deposits (5) :
Fixed Annuities	$	0.173		$	0.282		$	0.224		$	0.220		$	0.197			13.9	%	$	0.905		$	0.922			1.9	%
Variable Annuities		0.551			0.581			0.631			0.556			0.551			-			2.490			2.318			-6.9	%
Total Annuities Incremental Deposits		0.724			0.862			0.855			0.776			0.747			3.2	%		3.395			3.240			-4.6	%
Total Alliance Mutual Funds Incremental Deposits		0.357			0.533			0.464			0.656			0.437			22.4	%		1.114			2.090			87.7	%
Total Defined Contribution Incremental Deposits	$	1.080		$	1.396		$	1.318		$	1.431		$	1.185			9.7	%	$	4.509		$	5.330			18.2	%
(1) Gross deposits for year ended December 31, 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 Program 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.

 

12/31/2007																									PAGE 20
Employer Markets - Defined Contribution
Supplemental Data
Unaudited [Billions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Fixed Annuities - excluding fixed portion of variable contracts
Deposits (1)	$	0.093		$	0.198		$	0.146		$	0.221		$	0.189			103.2	%	$	0.506		$	0.754			49.0	%
Withdrawals		(0.118	)		(0.166	)		(0.140	)		(0.215	)		(0.203	)		-72.0	%		(0.501	)		(0.724	)		-44.5	%
Net Flows	$	(0.024	)	$	0.032		$	0.006		$	0.006		$	(0.014	)		41.7	%	$	0.005		$	0.030		NM
Fixed Contract Account Values	$	4.797		$	4.870		$	4.917		$	4.943		$	4.996			4.1	%	$	4.797		$	4.996			4.1	%
Fixed Portion of Variable Contracts
Deposits	$	0.090		$	0.100		$	0.087		$	0.084		$	0.079			-12.2	%	$	0.440		$	0.351			-20.2	%
Withdrawals		(0.222	)		(0.233	)		(0.236	)		(0.235	)		(0.208	)		6.3	%		(0.938	)		(0.912	)		2.8	%
Net Flows	$	(0.132	)	$	(0.133	)	$	(0.149	)	$	(0.150	)	$	(0.129	)		2.3	%	$	(0.499	)	$	(0.561	)		-12.4	%
Fixed Portion of Variable Contract Account Values	$	6.210		$	6.123		$	6.023		$	5.948		$	5.893			-5.1	%	$	6.210		$	5.893			-5.1	%
Variable Annuities - including fixed portion of variable contracts
Deposits (1)	$	0.649		$	0.755		$	0.664		$	0.648		$	0.639			-1.5	%	$	2.965		$	2.706			-8.7	%
Withdrawals		(0.891	)		(1.046	)		(0.982	)		(1.045	)		(1.050	)		-17.8	%		(3.495	)		(4.124	)		-18.0	%
Net Flows	$	(0.242	)	$	(0.291	)	$	(0.319	)	$	(0.397	)	$	(0.411	)		-69.8	%	$	(0.530	)	$	(1.418	)	NM
Variable Contract Account Values	$	23.685		$	23.799		$	24.504		$	24.528		$	23.769			0.4	%	$	23.685		$	23.769			0.4	%
Average Daily Variable Annuity Account Values	$	17.164		$	17.582		$	18.377		$	18.162		$	18.235			6.2	%	$	16.432		$	18.043			9.8	%
Total Annuity based Retirement Plan Product Spread Information (2)																Change									Change
																(Basis Point)									(Basis Point)
Net investment income (3) (4)		6.23	%		6.20	%		6.13	%		6.00	%		6.05	%		(18	)		6.34	%		6.11	%		(23	)
Interest credited to policyholders		3.79	%		3.81	%		3.82	%		3.84	%		3.85	%		6			3.73	%		3.82	%		9
Spread (3) (4)		2.44	%		2.39	%		2.31	%		2.16	%		2.20	%		(24	)		2.61	%		2.29	%		(32	)

(1) Gross deposits for the year ended December 31, 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. We exclude net investment income earned on investments supporting statutory surplus from our spread calculations. 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 5 bps in the 4th quarter of 2007, 7 bps in the 3rd quarter of 2007, 9 bps in the 2nd quarter of 2007, 3 bps in the 1st quarter of 2007 and 4 bps in the 4th quarter of 2006.

(4) The net investment income and spread reported above include earnings from alternative investments, such as limited partnerships and hedge funds. The impact on investment income yields from these investments was (2) bps in the 4th quarter of 2007, (11) bps in the 3rd quarter of 2007, 11 bps in the 2nd quarter of 2007, 7 bps in the 1st quarter of 2007 and 9 bps in the 4th quarter of 2006. The impact was 1 bp and 7 bps for the years ended December 31, 2007 and 2006, respectively.

12/31/2007																						PAGE 21
Employer Markets - Executive Benefits
Income Statements & Operational Data
Unaudited [Millions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Operating Revenues
Insurance premiums	$	3.3		$	0.6		$	0.1		$	0.6		$	0.0			-100.0	%	$	4.7		$	1.3			-72.3	%
Surrender charges		0.0			(0.0	)		0.0			0.0			0.1		NM				0.0			0.1		NM
Mortality assessments		8.5			8.9			8.2			8.4			9.0			5.9	%		27.0			34.5			27.8	%
Expense assessments		5.5			6.2			5.9			5.3			5.8			5.5	%		18.1			23.2			28.2	%
Net investment income		90.5			94.8			99.3			98.1			98.6			9.0	%		316.6			390.8			23.4	%
Other revenues and fees		1.3			1.2			1.3			1.2			1.3			-			5.3			5.1			-3.8	%
Total Operating Revenues		109.1			111.7			114.9			113.5			114.9			5.3	%		371.8			455.0			22.4	%
Operating Expenses
Insurance benefits		39.7			33.1			33.3			35.9			35.7			-10.1	%		138.5			137.9			-0.4	%
Interest credited to contractholder funds		42.0			44.8			50.3			50.9			51.2			21.9	%		131.4			197.2			50.1	%
Operating and acquisition expenses		9.1			12.7			11.4			11.6			6.1			-33.0	%		32.5			41.8			28.6	%
Total Operating Expenses		90.8			90.7			95.0			98.4			92.9			2.3	%		302.3			377.0			24.7	%
Income from operations before Federal income taxes		18.3			21.1			19.9			15.1			22.0			20.2	%		69.4			78.1			12.5	%
Federal income taxes		5.6			6.6			6.0			4.1			7.0			25.0	%		20.2			23.7			17.3	%
Income from Operations	$	12.7		$	14.4		$	13.9		$	11.0		$	15.0			18.1	%	$	49.2		$	54.3			10.4	%
Effective tax rate		30.7	%		31.5	%		30.3	%		27.1	%		31.7	%					29.1	%		30.4	%
Average equity	$	528.2		$	539.3		$	527.2		$	536.5		$	551.3					$	476.8		$	538.6
Return on average equity		9.6	%		10.7	%		10.5	%		8.2	%		10.9	%					10.3	%		10.1	%
Operating and Acquisition Expenses
Commissions	$	11.2		$	6.5		$	6.8		$	6.5		$	14.0			25.0	%	$	31.5		$	33.8			7.3	%
General and administrative expenses		4.8			4.0			4.2			5.8			4.6			-4.2	%		17.4			18.6			6.9	%
Taxes, licenses and fees		1.3			1.5			1.3			1.2			1.6			23.1	%		5.0			5.5			10.0	%
Total commissions and expenses incurred		17.3			11.9			12.3			13.4			20.2			16.8	%		54.0			57.8			7.0	%
Less: commissions and expenses capitalized		(10.9	)		(6.9	)		(6.7	)		(6.6	)		(14.1	)		-29.4	%		(31.3	)		(34.3	)		-9.6	%
Amortization of DAC and VOBA, net of interest		2.8			7.7			5.8			4.8			0.0			-100.0	%		9.8			18.3			86.7	%
Net Operating and Acquisition Expenses	$	9.1		$	12.7		$	11.4		$	11.6		$	6.1			-33.0	%	$	32.4		$	41.8			29.0	%
General and administrative expenses - basis
points on account values - Annualized (1)		27			23			24			33			27			-			28			27			(1	)
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	258.0		$	265.3		$	260.5		$	276.2		$	273.2					$	113.6		$	265.3
Deferral		10.9			6.9			6.7			6.6			14.1						31.3			34.3
Amortization net of interest:
Unlocking		(0.3	)		(2.7	)		(2.3	)		(1.5	)		2.3						0.3			(4.1	)
Amortization excluding unlocking		(2.5	)		(5.1	)		(3.4	)		(3.4	)		(2.3	)					(10.1	)		(14.2	)
Deferrals, net of amortization included in
operating and acquisition expenses		8.2			(0.8	)		0.9			1.8			14.1						21.6			16.0
Adjustment related to realized (gains) losses
on available-for-sale securities		(0.8	)		(0.5	)		(0.1	)		0.1			0.6						(1.5	)		0.0
Adjustment related to unrealized (gains) losses
on available-for-sale securities		(0.1	)		(3.4	)		14.9			(4.8	)		(4.9	)					(10.9	)		1.7
Business acquired		-			-			-			-			-						142.5			-
Balance at end of period	$	265.3		$	260.5		$	276.2		$	273.2		$	283.0					$	265.3		$	283.0
Roll Forward of Deferred Front-End Loads
Balance at beginning of period	$	20.3		$	21.7		$	22.0		$	21.9		$	22.4					$	17.9		$	21.7
Deferral		1.5			1.1			0.9			0.7			1.4						4.4			4.1
Amortization net of interest:
Unlocking		0.1			(0.3	)		(0.6	)		0.1			0.3						0.3			(0.5	)
Amortization excluding unlocking		(0.2	)		(0.4	)		(0.3	)		(0.3	)		(0.3	)					(0.9	)		(1.4	)
Deferrals, net of amortization included in
expense assessments		1.4			0.3			(0.1	)		0.5			1.4						3.8			2.2
Balance at end of period	$	21.7		$	22.0		$	21.9		$	22.4		$	23.8					$	21.7		$	23.8
(1) Includes distribution costs.

 

12/31/2007																									PAGE 22
Employer Markets - Executive Benefits
Account Value Roll Forward and Supplemental Data
Unaudited [Billions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
COLI/BOLI- Balance Beginning-of-Period	$	4.252		$	4.305		$	4.264		$	4.353		$	4.391			3.3	%	$	1.318		$	4.305			226.6	%
Business acquired		-			-			-			-			-		NM				2.795			-			-100.0	%
Deposits		0.085			0.065			0.079			0.052			0.107			25.9	%		0.267			0.303			13.5	%
Withdrawals & deaths		(0.092	)		(0.140	)		(0.053	)		(0.057	)		(0.070	)		23.9	%		(0.210	)		(0.320	)		-52.4	%
Net flows		(0.007	)		(0.075	)		0.026			(0.005	)		0.037		NM				0.057			(0.017	)	NM
Policyholder assessments		(0.019	)		(0.018	)		(0.017	)		(0.017	)		(0.019	)		-			(0.060	)		(0.070	)		-16.7	%
Interest credited and change in market value		0.079			0.052			0.080			0.060			0.027			-65.8	%		0.196			0.218			11.2	%
COLI/BOLI-Balance End-of-Period	$	4.305		$	4.264		$	4.353		$	4.391		$	4.436			3.0	%	$	4.305		$	4.436			3.0	%
COLI/BOLI In-Force	$	15.645		$	14.747		$	14.809		$	14.900		$	15.292			-2.3	%	$	15.645		$	15.292			-2.3	%
Run Off Institutional Pensions Account Values -
Balance at End of Period	$	2.720		$	2.734		$	2.729		$	2.720		$	2.094			-23.0	%	$	2.720		$	2.094			-23.0	%

12/31/2007																									PAGE 23
Employer Markets - Group Protection
Income Statements & Operational Data
Unaudited [Millions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Operating Revenues
Insurance premiums	$	315.9		$	331.3		$	361.3		$	336.8		$	349.7			10.7	%	$	949.0		$	1,379.2			45.3	%
Net investment income		28.0			27.9			28.5			29.5			29.5			5.4	%		80.2			115.3			43.8	%
Other revenues and fees		0.8			1.1			1.2			1.3			1.4			75.0	%		2.5			5.0			100.0	%
Total Operating Revenues		344.8			360.4			391.0			367.5			380.6			10.4	%		1,031.8			1,499.6			45.3	%
Operating Expenses
Insurance benefits		224.0			246.6			265.7			235.0			252.1			12.5	%		663.3			999.4			50.7	%
Operating and acquisition expenses		69.6			78.3			80.7			81.4			85.1			22.3	%		216.2			325.4			50.5	%
Total Operating Expenses		293.6			324.9			346.3			316.4			337.2			14.9	%		879.5			1,324.8			50.6	%
Income from operations before Federal income taxes		51.2			35.5			44.7			51.2			43.4			-15.2	%		152.3			174.8			14.8	%
Federal income taxes		17.9			12.4			15.7			17.9			15.2			-15.1	%		53.3			61.3			15.0	%
Income from Operations	$	33.2		$	23.1		$	29.0		$	33.2		$	28.2			-15.1	%	$	99.0		$	113.5			14.6	%
Effective tax rate		35.0	%		35.0	%		35.1	%		35.1	%		35.1	%					35.0	%		35.1	%
Average equity	$	913.4		$	915.1		$	917.5		$	936.2		$	956.4					$	890.4		$	931.3
Return on average equity		14.6	%		10.1	%		12.6	%		14.2	%		11.8	%					22.2	%		12.2	%
Operating and Acquisition Expenses
Commissions	$	36.8		$	39.4		$	41.4		$	40.3		$	43.1			17.1	%	$	110.1		$	164.3			49.2	%
General and administrative expenses		37.5			32.7			37.5			37.9			42.8			14.1	%		104.8			150.9			44.0	%
Taxes, licenses and fees		6.9			9.7			9.5			8.1			6.2			-10.1	%		22.6			33.6			48.7	%
Total commissions and expenses incurred		81.2			81.8			88.4			86.3			92.1			13.4	%		237.6			348.7			46.8	%
Less commissions and expenses capitalized		(14.8	)		(11.2	)		(13.5	)		(13.0	)		(16.7	)		-12.8	%		(37.2	)		(54.4	)		-46.2	%
Amortization of DAC and VOBA, net of interest		3.2			7.6			5.8			8.1			9.7			203.1	%		15.9			31.1			95.6	%
Net Operating and Acquisition Expenses	$	69.6		$	78.3		$	80.7		$	81.4		$	85.1			22.3	%	$	216.2		$	325.4			50.5	%
General and administrative expenses as a
percentage of premiums		11.9	%		9.9	%		10.4	%		11.2	%		12.2	%	NM				11.0	%		10.9	%		-9.1
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	126.1		$	137.6		$	103.7		$	111.4		$	116.4					$	-		$	137.6
Cumulative effect of adoption of SOP 05-1		-			(37.5	)		-			-			-						-			(37.5	)
Deferral		14.8			11.2			13.5			13.0			16.7						37.2			54.4
Amortization net of interest		(3.2	)		(7.6	)		(5.8	)		(8.1	)		(9.7	)					(15.9	)		(31.1	)
Deferrals, net of amortization included in
operating and acquisition expenses		11.5			3.5			7.8			5.0			7.0						21.4			23.2
Business acquired		-			-			-			-			-						116.2			-
Balance at end of period	$	137.6		$	103.7		$	111.4		$	116.4		$	123.4					$	137.6		$	123.4

 

12/31/2007																									PAGE 24
Employer Markets - Group Protection
Supplemental Data
Unaudited [Millions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Annualized Sales
Life	$	43.1		$	22.7		$	23.6		$	22.0		$	53.9			25.1	%	$	77.8		$	122.3			57.2	%
Disability		56.9			28.6			28.9			30.5			72.1			26.7	%		104.5			160.0			53.1	%
Dental		13.1			9.4			9.5			8.3			16.6			26.7	%		26.4			43.8			65.9	%
Premiums:
Life	$	112.5		$	118.6		$	125.0		$	123.4		$	126.5			12.4	%	$	334.0		$	493.5			47.8	%
Disability		138.5			144.8			150.4			151.1			155.2			12.1	%		407.2			601.4			47.7	%
Dental		31.8			32.9			33.5			34.1			35.2			10.7	%		94.9			135.7			43.0	%
Other		33.2			35.0			52.5			28.3			32.8			-1.2	%		112.8			148.5			31.6	%
Total	$	315.9		$	331.3		$	361.3		$	336.8		$	349.7			10.7	%	$	948.9		$	1,379.2			45.3	%
Product Line Results:
Life	$	13.6		$	8.6		$	10.0		$	11.0		$	11.2			-17.6	%	$	36.9		$	40.9			10.8	%
Disability		15.5			13.3			18.1			18.8			13.7			-11.6	%		52.7			63.9			21.3	%
Dental		3.0			0.2			(0.1	)		1.3			2.1			-30.0	%		6.6			3.5			-47.0	%
Other		1.1			0.9			1.0			2.2			1.2			9.1	%		2.8			5.3			89.3	%
Total	$	33.2		$	23.1		$	29.0		$	33.2		$	28.2			-15.1	%	$	99.0		$	113.5			14.6	%
Loss Ratios:
Life		69.0	%		75.0	%		73.9	%		71.2	%		72.1	%		4.5	%		69.7	%		73.0	%		4.7	%
Disability		69.3	%		69.5	%		66.4	%		65.0	%		69.1	%		-0.3	%		64.4	%		67.5	%		4.7	%
Dental		68.7	%		79.2	%		79.3	%		74.9	%		73.1	%		6.4	%		72.2	%		76.6	%		6.0	%
Combined loss ratios		69.1	%		72.7	%		70.8	%		68.6	%		70.7	%		2.4	%		67.4	%		70.7	%		4.9	%

12/31/2007																									PAGE 25
Investment Management
Income Statements
Unaudited [Millions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Operating Revenues
Investment advisory fees - External	$	86.5		$	89.2		$	90.8		$	91.5		$	88.2			2.0	%	$	327.9		$	359.7			9.7	%
Investment advisory fees - Insurance-related		24.7			25.7			21.5			20.1			19.8			-19.8	%		97.0			87.1			-10.2	%
Other revenues and fees		37.7			35.3			38.7			38.5			31.0			-17.8	%		138.7			143.4			3.4	%
Total Operating Revenues		148.9			150.2			151.0			150.1			139.0			-6.6	%		563.5			590.2			4.7	%
Operating Expenses
Operating and administrative expenses		126.2			124.6			133.1			116.0			96.8			-23.3	%		478.9			470.5			-1.8	%
Total Operating Expenses		126.2			124.6			133.1			116.0			96.8			-23.3	%		478.9			470.5			-1.8	%
Income from operations before Federal income taxes		22.7			25.6			17.9			34.1			42.2			85.9	%		84.6			119.7			41.5	%
Federal income taxes		8.3			9.3			6.6			12.3			15.2			83.1	%		29.4			43.3			47.3	%
Income from Operations	$	14.4		$	16.2		$	11.3		$	21.8		$	27.0			87.5	%	$	55.2		$	76.4			38.4	%
Effective tax rate		36.5	%		36.4	%		36.8	%		36.1	%		35.9	%					34.8	%		36.2	%
Pre-tax Operating Margin (1)		15.2	%		17.0	%		11.8	%		22.7	%		30.3	%					15.0	%		20.3	%
After-tax Operating Margin (2)		9.7	%		10.8	%		7.5	%		14.5	%		19.4	%					9.8	%		12.9	%
Operating and Administrative Expenses
General and administrative expenses	$	109.1		$	106.5		$	116.7		$	100.5		$	81.0			-25.8	%	$	408.8		$	404.8			-1.0	%
Depreciation and amortization		2.4			2.6			2.5			2.5			2.3			-4.2	%		9.3			9.9			6.5	%
Sub-advisory fees		9.8			10.0			8.4			7.7			8.1			-17.3	%		41.2			34.2			-17.0	%
Total general and administrative expenses		121.3			119.1			127.7			110.7			91.4			-24.6	%		459.2			448.9			-2.2	%
Taxes, licenses and fees		3.5			4.1			4.0			3.9			4.0			14.3	%		13.4			16.0			19.4	%
Amortization of intangibles		1.4			1.4			1.4			1.4			1.4			-			6.4			5.6			-12.5	%
Total Operating and Administrative expenses	$	126.2		$	124.6		$	133.1		$	116.0		$	96.8			-23.3	%	$	478.9		$	470.5			-1.8	%
(1) Pre-tax operating margin is calculated as Income from Operations before Federal income taxes divided by Operating Revenues.
(2) After-tax operating margin is calculated as Income from Operations divided by Operating Revenues.

12/31/2007																									PAGE 26
Investment Management
Assets Under Management Roll Forward
Unaudited [Billions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Retail Fixed - Balance-Beginning-of-Period	$	10.522		$	10.993		$	11.644		$	12.303		$	13.014			23.7	%	$	9.625		$	10.993			14.2	%
Sales (1)		1.091			1.365			1.494			1.467			1.635			49.9	%		4.057			5.961			46.9	%
Redemptions (2)		(0.802	)		(0.910	)		(1.062	)		(1.060	)		(1.330	)		-65.8	%		(3.241	)		(4.361	)		-34.6	%
Transfers		0.028			0.014			(0.005	)		0.027			0.017			-39.3	%		0.014			0.053			278.6	%
Net Flows		0.318			0.470			0.428			0.434			0.321			0.9	%		0.830			1.653			99.2	%
Net investment gains and change in market value		0.211			0.181			0.119			0.278			0.145			-31.3	%		0.595			0.723			21.5	%
Transfer of assets to third-party (2)		(0.057	)		-			(0.055	)		-			(0.018	)		68.4	%		(0.057	)		(0.072	)		-26.3	%
Transfer of assets to an intercompany manager (3)		-			-			0.166			-			-		NM				-			0.166		NM
Balance at End-of-Period	$	10.993		$	11.644		$	12.303		$	13.014		$	13.463			22.5	%	$	10.993		$	13.463			22.5	%
Retail Equity - Balance-Beginning-of-Period	$	36.954		$	39.627		$	40.250		$	38.586		$	38.166			3.3	%	$	32.732		$	39.627			21.1	%
Sales (1)		2.101			2.238			1.778			1.344			1.957			-6.9	%		8.935			7.318			-18.1	%
Redemptions (2)		(2.338	)		(2.455	)		(2.487	)		(2.084	)		(2.903	)		-24.2	%		(8.296	)		(9.929	)		-19.7	%
Transfers		(0.030	)		(0.020	)		0.004			(0.029	)		(0.025	)		16.7	%		(0.091	)		(0.069	)		24.2	%
Net Flows		(0.267	)		(0.237	)		(0.704	)		(0.768	)		(0.970	)	NM				0.547			(2.680	)	NM
Net investment gains and change in market value		3.074			0.861			2.190			0.348			(0.915	)	NM				6.481			2.483			-61.7	%
Transfer of assets to third-party (2)		(0.133	)		-			(0.099	)		-			(0.030	)		77.4	%		(0.133	)		(0.129	)		3.0	%
Transfer of assets to an intercompany manager (3)		-			-			(3.051	)		-			-		NM				-			(3.051	)	NM
Balance at End-of-Period	$	39.627		$	40.250		$	38.586		$	38.166		$	36.250			-8.5	%	$	39.627		$	36.250			-8.5	%
Total Retail - Balance-Beginning-of-Period	$	47.476		$	50.620		$	51.895		$	50.889		$	51.180			7.8	%	$	42.357		$	50.620			19.5	%
Retail sales-Annuities		0.932			1.300			0.902			0.891			0.954			2.4	%		3.647			4.047			11.0	%
Retail sales-Mutual Funds		1.768			1.753			1.896			1.543			2.241			26.8	%		5.617			7.433			32.3	%
Retail sales-Managed Accounts & Other		0.493			0.550			0.474			0.377			0.398			-19.3	%		3.728			1.799			-51.7	%
Total Retail Sales (1)		3.192			3.603			3.272			2.811			3.592			12.5	%		12.991			13.279			2.2	%
Redemptions (2)		(3.140	)		(3.365	)		(3.548	)		(3.144	)		(4.233	)		-34.8	%		(11.538	)		(14.290	)		-23.9	%
Transfers		(0.002	)		(0.005	)		(0.001	)		(0.001	)		(0.008	)	NM				(0.077	)		(0.016	)		79.2	%
Net Flows		0.050			0.233			(0.277	)		(0.334	)		(0.649	)	NM				1.377			(1.026	)	NM
Net investment gains and change in market value		3.285			1.041			2.309			0.626			(0.770	)	NM				7.077			3.206			-54.7	%
Transfer of assets to third-party (2)		(0.190	)		-			(0.153	)		-			(0.048	)		74.7	%		(0.190	)		(0.201	)		-5.8	%
Transfer of assets to an intercompany manager (3)		-			-			(2.885	)		-			-		NM				-			(2.885	)	NM
Balance at End-of-Period	$	50.620		$	51.895		$	50.889		$	51.180		$	49.713			-1.8	%	$	50.620		$	49.713			-1.8	%
Institutional Fixed - Balance- Beginning-of-Period	$	19.387		$	22.841		$	23.469		$	23.565		$	24.837			28.1	%	$	14.699		$	22.841			55.4	%
Inflows (1)		3.644			1.560			1.514			2.233			0.577			-84.2	%		9.490			5.884			-38.0	%
Withdrawals/terminations		(0.487	)		(0.480	)		(1.271	)		(1.306	)		(0.673	)		-38.2	%		(2.200	)		(3.730	)		-69.5	%
Transfers		0.001			0.000			(0.000	)		(0.001	)		0.138		NM				0.010			0.137		NM
Net Flows		3.157			1.081			0.243			0.927			0.041			-98.7	%		7.300			2.291			-68.6	%
Net investment gains and change in market value		0.297			0.328			(0.147	)		0.345			0.180			-39.4	%		0.842			0.707			-16.0	%
Transfer of assets to third-party (4)		-			-			-			-			(12.313	)	NM				-			(12.313	)	NM
Transfer of assets to an intercompany manager (3)		-			(0.780	)		-			-			-		NM				-			(0.780	)	NM
Balance at End-of-Period	$	22.841		$	23.469		$	23.565		$	24.837		$	12.746			-44.2	%	$	22.841		$	12.746			-44.2	%
Institutional Equity - Balance- Beginning-of-Period	$	22.649		$	23.845		$	22.782		$	23.271		$	23.699			4.6	%	$	20.576		$	23.845			15.9	%
Inflows (1)		1.244			0.870			1.363			0.701			1.653			32.9	%		5.612			4.588			-18.2	%
Withdrawals/terminations		(1.734	)		(2.273	)		(1.753	)		(1.202	)		(1.996	)		-15.1	%		(4.913	)		(7.224	)		-47.0	%
Transfers		(0.001	)		0.000			(0.000	)		(0.001	)		(0.001	)		-			(0.007	)		(0.001	)		85.7	%
Net Flows		(0.490	)		(1.402	)		(0.391	)		(0.501	)		(0.343	)		30.0	%		0.691			(2.637	)	NM
Net investment gains and change in market value		1.687			0.339			1.242			0.929			(0.457	)	NM				2.578			2.053			-20.4	%
Transfer of assets to an intercompany manager (3)		-			-			(0.363	)		-			-		NM				-			(0.363	)	NM
Balance at End-of-Period	$	23.845		$	22.782		$	23.271		$	23.699		$	22.898			-4.0	%	$	23.845		$	22.898			-4.0	%
Total Institutional - Balance- Beginning-of-Period	$	42.035		$	46.686		$	46.251		$	46.836		$	48.536			15.5	%	$	35.276		$	46.686			32.3	%
Inflows (1)		4.888			2.431			2.877			2.934			2.230			-54.4	%		15.102			10.472			-30.7	%
Withdrawals/terminations		(2.221	)		(2.753	)		(3.025	)		(2.508	)		(2.669	)		-20.2	%		(7.113	)		(10.954	)		-54.0	%
Transfers		(0.000	)		0.001			(0.001	)		(0.001	)		0.137		NM				0.002			0.136		NM
Net Flows		2.666			(0.321	)		(0.148	)		0.425			(0.302	)	NM				7.991			(0.346	)	NM
Net investment gains and change in market value		1.984			0.667			1.096			1.274			(0.277	)	NM				3.419			2.760			-19.3	%
Transfer of assets to third-party (4)		-			-			-			-			(12.313	)	NM				-			(12.313	)	NM
Transfer of assets to an intercompany manager (3)		-			(0.780	)		(0.363	)		-			-		NM				-			(1.143	)	NM
Balance at End-of-Period	$	46.686		$	46.251		$	46.836		$	48.536		$	35.644			-23.7	%	$	46.686		$	35.644			-23.7	%
Total Retail and Institutional - At End-of-Period	$	97.307		$	98.146		$	97.725		$	99.716		$	85.357			-12.3	%	$	97.307		$	85.357			-12.3	%
General Account Assets-End-of-Period (5)	$	67.437		$	67.658		$	66.423		$	67.324		$	67.416			-		$	67.437		$	67.416			-
Total Assets Under Management
At End-of-Period	$	164.743		$	165.803		$	164.148		$	167.040		$	152.774			-7.3	%	$	164.743		$	152.774			-7.3	%
Total Retail and Institutional - Net Flows (2)	$	2.717		$	(0.088	)	$	(0.425	)	$	0.091		$	(0.950	)	NM			$	9.368		$	(1.372	)	NM
Subadvised Assets, included in Assets
Under Management above
Retail	$	18.023		$	18.466		$	16.329		$	16.380		$	16.219			-10.0	%	$	18.023		$	16.219			-10.0	%
Institutional		4.648			4.645			4.594			4.734			4.570			-1.7	%		4.648			4.570			-1.7	%
Total Subadvised Assets	$	22.671		$	23.111		$	20.922		$	21.114		$	20.789			-8.3	%	$	22.671		$	20.789			-8.3	%

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

(2) Reflects assets transferred to a third-party manager (Upromise) as a result of Delaware's decision to exit the 529 Plan business.  In 4Q06, a reclassification of $190m was made from Redemptions to Transfer of assets to third-party;  subsequent 529 Plan assets which transferred in 2Q07 and 4Q07 are reflected in Transfer of assets to third-party.

(3) Reflects assets that were transferred to an intercompany manager;  this transfer does not impact Lincoln's consolidated assets under management.

(4) Reflects the sale of a portion of our institutional fixed-income business to an unaffiliated investment management company in 4Q07.

(5) Balances for 4Q06 and 1Q07 have been restated to reflect adjustments made to Jefferson Pilot separate accounts.  The impact of these changes was $370 million and $366 million, respectively.

12/31/2007																									PAGE 27
Lincoln UK
Income Statements
Unaudited [Millions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Operating Revenues
Insurance premiums	$	21.0		$	24.2		$	24.3		$	25.6		$	21.2			1.0	%	$	78.6		$	95.3			21.2	%
Mortality assessments		9.0			10.0			8.9			9.2			9.1			1.1	%		34.4			37.1			7.8	%
Expense assessments		36.8			37.1			39.9			33.0			46.6			26.6	%		123.5			156.6			26.8	%
Net investment income		18.0			19.3			19.4			20.9			21.5			19.4	%		71.4			81.1			13.6	%
Other revenues and fees		-			0.1			-			-			-		NM				0.1			0.1			-
Total Operating Revenues		84.8			90.7			92.5			88.7			98.3			15.9	%		308.0			370.2			20.2	%
Operating Expenses
Insurance benefits		30.4			36.0			34.4			30.2			36.9			21.4	%		108.2			137.5			27.1	%
Operating and acquisition expenses		39.1			38.0			40.2			42.5			41.9			7.2	%		140.1			162.6			16.1	%
Total Operating Expenses		69.5			74.0			74.6			72.7			78.8			13.4	%		248.3			300.1			20.9	%
Income from operations before Federal income taxes		15.3			16.7			18.0			15.9			19.5			27.5	%		59.7			70.1			17.4	%
Federal income taxes		5.4			5.9			6.3			5.6			6.8			25.9	%		20.9			24.5			17.2	%
Income from Operations	$	9.9		$	10.9		$	11.7		$	10.3		$	12.7			28.3	%	$	38.9		$	45.6			17.2	%
Effective tax rate		35.3	%		35.3	%		35.0	%		35.2	%		34.9	%					34.9	%		35.0	%
Average equity	$	392.3		$	384.8		$	382.7		$	378.0		$	368.5					$	410.8		$	378.5
Return on average equity		10.1	%		11.3	%		12.2	%		10.9	%		13.8	%					9.5	%		12.0	%
Operating and Acquisition Expenses
Commissions	$	1.1		$	1.0		$	1.0		$	1.3		$	1.5			36.4	%	$	4.5		$	4.9			8.9	%
General and administrative expenses		27.9			26.5			26.7			26.9			28.1			0.7	%		99.6			108.3			8.7	%
Total commissions and expenses incurred		29.0			27.6			27.7			28.2			29.6			2.1	%		104.1			113.2			8.7	%
Less: commissions and expenses capitalized		(0.7	)		(0.6	)		(0.6	)		(1.5	)		(1.4	)	NM				(1.9	)		(4.0	)	NM
Amortization of DAC and VOBA, net of interest		10.8			11.0			13.0			15.8			13.7			26.9	%		37.9			53.4			40.9	%
Net Operating and Acquisition Expenses	$	39.1		$	38.0		$	40.2		$	42.5		$	41.9			7.2	%	$	140.1		$	162.6			16.1	%
Roll Forward of Deferred Acquisition Costs & Value of Business Acquired
Balance at beginning of period	$	783.4		$	809.0		$	802.6		$	806.5		$	807.3					$	743.4		$	809.0
Deferral		0.7			0.6			0.6			1.5			1.4						1.9			4.0
Amortization net of interest:
Unlocking		-			0.7			(0.1	)		(0.9	)		(0.9	)					5.1			(1.2	)
Amortization excluding unlocking		(10.8	)		(11.7	)		(12.9	)		(14.9	)		(12.8	)					(43.0	)		(52.2	)
Deferrals, net of amortization included in
operating and acquisition expenses		(10.1	)		(10.4	)		(12.4	)		(14.3	)		(12.3	)					(36.0	)		(49.4	)
Foreign currency translation adjustment		35.7			4.1			16.3			15.1			(22.9	)					101.5			12.6
Balance at end of period	$	809.0		$	802.6		$	806.5		$	807.3		$	772.1					$	809.0		$	772.1
Roll Forward of Deferred Front-End Load
Balance at beginning of period	$	392.8		$	404.5		$	400.4		$	402.6		$	398.2					$	363.1		$	404.5
Deferral		0.6			0.9			0.7			0.8			0.9						3.0			3.3
Amortization net of interest:
Unlocking		-			(1.0	)		0.1			(5.3	)		(1.0	)					13.5			(7.2	)
Amortization excluding unlocking		(6.8	)		(6.0	)		(6.7	)		(7.4	)		(7.5	)					(25.1	)		(27.7	)
Deferrals, net of amortization included in
expense assessments		(6.2	)		(6.1	)		(5.9	)		(11.9	)		(7.7	)					(8.5	)		(31.6	)
Foreign currency translation adjustment		17.9			2.0			8.1			7.5			(11.2	)					49.9			6.4
Balance at end of period	$	404.5		$	400.4		$	402.6		$	398.2		$	379.3					$	404.5		$	379.3

12/31/2007																									PAGE 28
Lincoln UK
Operational Data
Unaudited [Billions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Unit Linked Assets
Balance-Beg-of-Period	$	8.118		$	8.757		$	8.906		$	9.168		$	9.192			13.2	%	$	7.320		$	8.757			19.6	%
Deposits		0.071			0.068			0.100			0.079			0.075			5.6	%		0.318			0.323			1.6	%
Withdrawals (including charges) and Deaths		(0.232	)		(0.240	)		(0.251	)		(0.251	)		(0.227	)		2.2	%		(0.838	)		(0.969	)		-15.6	%
Net Flows		(0.161	)		(0.172	)		(0.151	)		(0.172	)		(0.152	)		5.6	%		(0.520	)		(0.646	)		-24.2	%
Investment income and change in market value		0.424			0.277			0.229			0.025			0.070			-83.5	%		0.911			0.601			-34.0	%
Foreign Currency Adjustment		0.376			0.045			0.183			0.171			(0.259	)	NM				1.046			0.139		NM
Unit Linked Assets - End-of-Period	$	8.757		$	8.906		$	9.168		$	9.192		$	8.850			1.1	%	$	8.757		$	8.850			1.1	%
Individual Life In-force	$	19.345		$	19.307		$	19.605		$	19.757		$	19.022			-1.7	%	$	19.345		$	19.022			-1.7	%
Exchange Rate - Dollars to Pounds
For-the-Period		1.930			1.964			1.989			2.025			2.051			6.3	%		1.847			2.007			8.7	%
End-of-Period		1.958			1.968			2.008			2.046			1.987			1.5	%		1.958			1.987			1.5	%

12/31/2007																									PAGE 29
Other Operations  (1)
Unaudited [Millions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Operating Revenues
Insurance premiums	$	3.8		$	2.1		$	(1.2	)	$	0.9		$	0.7			-81.6	%	$	5.3		$	2.5			-52.8	%
Net investment income		53.3			47.0			44.7			46.4			53.7			0.8	%		224.8			191.8			-14.7	%
Amortization of deferred gain on
indemnity reinsurance  (2)		18.8			18.6			18.6			18.6			18.6			-1.1	%		75.0			74.5			-0.7	%
Other revenues and fees		(4.4	)		(2.9	)		3.0			(6.3	)		(1.3	)		70.5	%		(10.9	)		(7.4	)		32.1	%
Communications revenues		28.3			24.8			28.8			26.6			26.5			-6.4	%		85.5			106.8			24.9	%
Inter-segment elimination of investment advisory fees		(25.2	)		(24.5	)		(19.6	)		(22.6	)		(20.3	)		19.4	%		(96.9	)		(87.1	)		10.1	%
Total Operating Revenues		74.6			65.1			74.3			63.7			77.8			4.3	%		282.7			281.0			-0.6	%
Operating Expenses
Insurance benefits		7.3			5.7			7.7			5.0			7.0			-4.1	%		17.0			25.4			49.4	%
Interest credited to contractholder funds		37.1			37.1			32.2			35.3			34.6			-6.7	%		143.7			139.2			-3.1	%
Operating and acquisition expenses		35.1			19.2			36.2			45.4			53.0			51.0	%		60.6			153.7			153.6	%
Taxes, licenses and fees		2.0			3.1			0.3			3.8			5.0			150.0	%		9.0			12.1			34.4	%
Interest		64.7			61.1			72.6			68.3			79.0			22.1	%		218.2			281.2			28.9	%
Communications expenses		13.3			14.7			15.2			13.2			13.5			1.5	%		41.0			56.5			37.8	%
Inter-segment elimination of investment advisory fees		(25.2	)		(24.5	)		(19.6	)		(22.6	)		(20.3	)		19.4	%		(96.9	)		(87.1	)		10.1	%
Total Operating Expenses		134.4			116.4			144.5			148.4			171.8			27.8	%		392.3			581.0			48.1	%
Loss from operations before Federal income taxes		(59.9	)		(51.3	)		(70.2	)		(84.6	)		(94.0	)		-56.9	%		(109.6	)		(300.0	)	NM
Federal income taxes		(29.9	)		(20.7	)		(31.0	)		(32.7	)		(31.6	)		-5.7	%		(56.4	)		(116.0	)	NM
Loss from Operations	$	(30.0	)	$	(30.6	)	$	(39.2	)	$	(51.9	)	$	(62.4	)	NM			$	(53.2	)	$	(184.1	)	NM
Discontinued Operations
Unaudited [Millions of Dollars]
	Three Months Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Discontinued Operations before disposition
Income on discontinued operations before federal income taxes	$	14.1		$	11.9		$	9.6		$	10.2		$	13.9			-1.4	%	$	33.6		$	45.7			36.0	%
Federal income taxes		5.0			4.2			3.4			3.6			4.8			-4.0	%		12.2			16.0			31.1	%
Income on discontinued operations before disposition		9.1			7.7			6.3			6.6			9.1			-			21.4			29.7			38.8	%
Disposition
Gain on disposition before federal taxes		-			-			-			-			57.1		NM				-			57.1		NM
Federal income taxes		-			-			-			-			193.0		NM				-			193.0		NM
Loss on disposition		-			-			-			-			(135.9	)	NM				-			(135.9	)	NM
Discontinued Operations	$	9.1		$	7.7		$	6.3		$	6.6		$	(126.8	)	NM			$	21.4		$	(106.2	)	NM
(1) Includes inter-segment eliminations of transactions.
(2) Represents the amortization of deferred gain recognized on the business sold through indemnity reinsurance to Swiss Re.

12/31/2007																									PAGE 30
Consolidated Domestic Deposits/Account Balances
Unaudited [Billions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
	2006			2007			2007			2007			2007			Change			2006			2007			Change
Deposits -  For the Period
Individual Markets - Fixed Annuities	$	1.100		$	0.821		$	0.982		$	1.231		$	1.288			17.1	%	$	3.505		$	4.321			23.3	%
Individual Markets - Variable Annuities		2.061			2.000			2.295			2.247			2.593			25.8	%		7.251			9.135			26.0	%
Individual Markets - Life Insurance		1.101			1.039			1.005			0.980			1.086			-1.4	%		3.365			4.110			22.1	%
Employer Markets - Fixed Annuities		0.183			0.299			0.233			0.305			0.268			46.4	%		0.946			1.105			16.8	%
Employer Markets - Variable Products (1)		0.916			1.188			1.041			1.219			0.997			8.8	%		3.639			4.445			22.1	%
Employer Markets - Executive Benefits		0.085			0.065			0.079			0.052			0.107			25.9	%		0.267			0.303			13.5	%
Inv Mgmt - Annuities		0.932			1.300			0.902			0.891			0.954			2.4	%		3.647			4.047			11.0	%
Inv Mgmt - Mutual Funds		1.768			1.753			1.896			1.543			2.241			26.8	%		5.617			7.433			32.3	%
Inv Mgmt - Managed Acct. & Other		0.493			0.550			0.474			0.377			0.398			-19.3	%		3.728			1.799			-51.7	%
Consolidating Adjustments		(0.833	)		(0.799	)		(0.890	)		(0.878	)		(0.926	)		-11.2	%		(2.905	)		(3.493	)		-20.2	%
Total Gross Retail Deposits		7.805			8.217			8.016			7.968			9.005			15.4	%		29.060			33.206			14.3	%
Inv Mgmt - Institutional		4.888			2.431			2.877			2.934			2.230			-54.4	%		15.102			10.472			-30.7	%
Consolidating Adjustments		(0.109	)		(0.112	)		(0.188	)		(0.030	)		(0.192	)		-76.1	%		(0.933	)		(0.521	)		44.2	%
Total Gross Deposits	$	12.584		$	10.536		$	10.706		$	10.873		$	11.043			-12.2	%	$	43.229		$	43.157			-0.2	%
Account Balances - End of Period
Individual Markets - Fixed Annuities	$	16.733		$	16.449		$	16.270		$	16.383		$	16.470			-1.6	%	$	16.733		$	16.470			-1.6	%
Individual Markets - Variable Annuities		48.169			50.300			55.171			58.293			58.643			21.7	%		48.169			58.643			21.7	%
Individual Markets - Life Insurance		26.490			26.924			27.465			27.875			28.122			6.2	%		26.490			28.122			6.2	%
Employer Markets - Fixed Annuities		11.006			10.993			10.940			10.891			10.889			-1.1	%		11.006			10.889			-1.1	%
Employer Markets - Variable Products (1)		22.650			23.482			25.024			25.745			25.168			11.1	%		22.650			25.168			11.1	%
Employer Markets - Executive Benefits		4.305			4.264			4.353			4.391			4.436			3.0	%		4.305			4.436			3.0	%
Inv Mgmt - Annuities		15.151			15.467			12.780			12.814			12.282			-18.9	%		15.151			12.282			-18.9	%
Inv Mgmt - Mutual Funds		17.875			18.747			19.894			20.274			19.793			10.7	%		17.875			19.793			10.7	%
Inv Mgmt - Managed Acct. & Other		17.594			17.681			18.215			18.092			17.638			0.3	%		17.594			17.638			0.3	%
Consolidating Adjustments		(14.687	)		(15.025	)		(12.240	)		(12.300	)		(11.798	)		19.7	%		(14.687	)		(11.798	)		19.7	%
Total Retail Account Balances		165.287			169.282			177.871			182.458			181.644			9.9	%		165.287			181.644			9.9	%
Inv Mgmt - Institutional		46.686			46.251			46.836			48.536			35.644			-23.7	%		46.686			35.644			-23.7	%
Consolidating Adjustments		(3.604	)		(2.829	)		(2.604	)		(2.529	)		(2.357	)		34.6	%		(3.604	)		(2.357	)		34.6	%
Total Account Balances	$	208.369		$	212.704		$	222.103		$	228.465		$	214.931			3.1	%	$	208.369		$	214.931			3.1	%
Total Domestic Net Flows
Unaudited [Billions of Dollars]
	Three Months Ended																		Year Ended
	Dec.			March			June			Sept.			Dec.			%			Dec.			Dec.			%
For the Period Ended	2006			2007			2007			2007			2007			Change			2006			2007			Change
Individual Markets - Life	$	0.727		$	0.698		$	0.586		$	0.635		$	0.745			2.5	%	$	2.023		$	2.663			31.6	%
Individual Markets - Annuities		0.892			0.754			1.138			1.291			1.808			102.7	%		2.665			4.991			87.3	%
Employer Markets - Defined Contribution		0.010			0.221			0.074			0.133			(0.091	)	NM				0.342			0.337			-1.5	%
Employer Markets - Executive Benefits		(0.007	)		(0.075	)		0.026			(0.005	)		0.037		NM				0.057			(0.017	)	NM
Investment Management - Retail		0.050			0.233			(0.277	)		(0.334	)		(0.649	)	NM				1.377			(1.026	)	NM
Consolidating Adjustments		(0.092	)		(0.004	)		0.330			0.071			0.140		NM				(0.007	)		0.536		NM
Total Retail Net Flows		1.580			1.827			1.877			1.790			1.991			26.0	%		6.457			7.484			15.9	%
Investment Management - Institutional		2.666			(0.321	)		(0.148	)		0.425			(0.302	)	NM				7.991			(0.346	)	NM
Consolidating Adjustments		0.068			0.048			(0.026	)		0.128			0.132			94.1	%		0.121			0.282		NM
Total Net Flows	$	4.315		$	1.554		$	1.702		$	2.343		$	1.821			-57.8	%	$	14.569		$	7.421			-49.1	%
(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.

12/31/2007											PAGE 31
Consolidated Investment Data - Assets Managed
Unaudited [Billions of Dollars]
	As of
	Dec.		March		June		Sept.		Dec.		%
	2006		2007		2007		2007		2007		Change
Assets Managed by Source
LNC's Investments and Cash:
Fixed maturity securities -
available for sale	$	55.853	$	56.256	$	55.447	$	56.086	$	56.276		0.8	%
Equity securities - available for sale		0.700		0.714		0.687		0.670		0.518		-26.0	%
Trading securities		3.036		2.910		2.818		2.717		2.730		-10.1	%
Other investments		11.898		11.970		11.916		12.075		12.398		4.2	%
Total LNC Investments		71.488		71.849		70.868		71.548		71.922		0.6	%
Separate accounts		80.534		83.147		89.497		92.903		91.113		13.1	%
Cash and invested cash		1.621		0.900		0.989		1.326		1.665		2.7	%
Total LNC		153.642		155.897		161.353		165.777		164.700		7.2	%
Non-affiliate assets managed		79.881		81.134		83.709		85.684		71.975		-9.9	%
Total Assets Managed	$	233.523	$	237.031	$	245.063	$	251.461	$	236.675		1.3	%
Assets Managed by Advisor
Investment Management segment
(See page 26 for additional detail)	$	97.307	$	98.146	$	97.725	$	99.716	$	85.357		-12.3	%
DLIA-Corp
(Assets managed internally-see page 26)		67.437		67.658		66.423		67.324		67.416		-
Lincoln UK		10.108		10.255		10.536		10.589		10.247		1.4	%
Domestic Policy Loans (excluding Lincoln UK)		2.755		2.763		2.783		2.786		2.831		2.8	%
Non-LNC Affiliates		55.916		58.209		67.596		71.045		70.824		26.7	%
Total Assets Managed	$	233.523	$	237.031	$	245.063	$	251.461	$	236.675		1.3	%

12/31/2007																PAGE 32
Consolidated Investment Data
Unaudited [Millions of Dollars]
	Three Months Ended
	Dec.			March			June			Sept.			Dec.			%
	2006			2007			2007			2007			2007			Change
Net Investment Income
Fixed maturity AFS securities	$	841.7		$	843.8		$	847.1		$	851.9		$	868.0			3.1	%
Equity AFS securities		8.5			8.6			11.8			10.4			10.4			22.4	%
Trading securities		48.6			45.4			44.4			44.0			42.4			-12.8	%
Mortgage loans on real estate		128.5			130.6			131.8			123.0			122.0			-5.1	%
Real estate		20.6			15.2			12.5			15.5			13.3			-35.4	%
Policy loans		43.7			42.6			44.3			43.0			44.6			2.1	%
Invested cash		15.6			18.2			14.7			18.8			20.9			34.0	%
Other investments		71.8			29.8			109.7			8.5			(18.0	)	NM
Investment revenue		1,179.0			1,134.2			1,216.2			1,115.2			1,103.5			-6.4	%
Investment expense		(52.6	)		(44.6	)		(46.3	)		(48.3	)		(45.2	)		14.1	%
Net Investment Income	$	1,126.3		$	1,089.5		$	1,169.8		$	1,066.9		$	1,058.3			-6.0	%
Mean Invested Assets (Amortized Cost)	$	70,451.4		$	69,905.7		$	70,062.2		$	70,535.5		$	70,718.2
Ratio of Net Investment Income Over Mean Invested Assets		6.39	%		6.23	%		6.68	%		6.05	%		5.99	%
	Three Months Ended
	Dec.			March			June			Sept.			Dec.			%
	2006			2007			2007			2007			2007			Change
Realized Investment Gains (Losses)
Fixed maturities	$	10.6		$	44.2		$	(20.2	)	$	(17.8	)	$	(71.0	)	NM
Equity securities		-			2.2			4.0			1.2			(110.6	)	NM
Other gains (losses), net		3.5			(0.1	)		9.4			(5.0	)		7.6			117.1	%
Policyholders' interest		7.6			(1.9	)		(0.2	)		(14.0	)		2.0			-73.7	%
Capital gains expense		-			-			-			-			-		NM
Total pretax gains (losses)		21.7			44.4			(7.0	)		(35.6	)		(172.0	)	NM
Amortization of DAC, VOBA and deferred
sales inducements		(8.9	)		(17.9	)		(1.6	)		0.2			63.2		NM
Income taxes		3.4			9.3			(3.8	)		(12.2	)		(37.4	)	NM
Realized investment gains (losses), net of taxes	$	9.4		$	17.1		$	(4.9	)	$	(23.2	)	$	(71.4	)	NM
				As of December 31, 2007									As of December 31, 2006
				Amount			% of Total						Amount			% of Total
Available-for-Sale and Trading Securities  [Millions of Dollars]
Fixed Maturity Sec (Fair Value)				$	59,003.8			99.1	%				$	58,889.8			98.8	%
Fixed Maturity Sec (Amortized Cost)					58,578.9			99.1	%					57,725.8			98.9	%
Equity Securities (Fair Value)					520.0			0.9	%					700.2			1.2	%
Equity Securities (Amortized Cost)					549.9			0.9	%					656.8			1.1	%
% of Available-for-Sale Fixed Maturity Securities (Based on Fair Value)
Treasuries and AAA								23.1	%								19.6	%
AA or better								32.9	%								28.1	%
BB or less								5.1	%								6.3	%
General Account Investments				As of December 31, 2007									As of December 31, 2006
				Amount			% of Total						Amount			% of Total
Fixed maturities- security sector:
Corporate bonds				$	44,147.9			78.5	%				$	45,489.4			81.4	%
U.S. government bonds					222.0			0.4	%					263.4			0.5	%
Foreign government bonds					1,037.5			1.8	%					1,141.6			2.0	%
Mortgage backed securities					10,604.6			18.8	%					8,691.3			15.6	%
State and municipal bonds					153.1			0.3	%					159.4			0.3	%
Preferred stocks - redeemable					110.7			0.2	%					108.3			0.2	%
Total				$	56,275.7			100.0	%				$	55,853.4			100.0	%
	As of
	Dec.			March			June			Sept.			Dec.			%
	2006			2007			2007			2007			2007			Change
Composition of Investment Portfolio:
Securities available-for-sale, at fair value:
Fixed Maturity	$	55,853.4		$	56,255.6		$	55,447.0		$	56,086.1		$	56,275.7			0.8	%
Equity		700.2			713.9			686.8			670.3			518.0			-26.0	%
Trading securities		3,036.3			2,909.7			2,818.3			2,716.6			2,730.2			-10.1	%
Mortgage loans on real estate & real estate		7,805.6			7,822.2			7,698.4			7,665.7			7,681.0			-1.6	%
Policy loans		2,759.7			2,766.8			2,787.0			2,790.2			2,834.7			2.7	%
Derivative Investments		415.3			412.6			375.9			554.1			807.1			94.3	%
Other investments		880.8			932.9			1,019.1			1,030.0			1,075.0			22.0	%
Total	$	71,451.3		$	71,813.6		$	70,832.5		$	71,512.9		$	71,921.6			0.7	%