Lincoln National (LNC) 8-K Results of Operations and Financial Condition

Exhibit 99.2

Lincoln Statistical Report
	second Q U A R T E R
		2 0 0 8
The financial data in this document is dated July 29, 2008 and has not been updated since that date.  LNC does not intend to update this document.

Lincoln Financial Group
Statistical Report
Second Quarter
2008
Table of Contents
LFG Analyst Coverage
Notes
Financial Highlights	1 - 3
Consolidated Operating Expense Detail	4
Operating Results Summary	5
Details Underlying Realized Gain (Loss), After-DAC	6
Consolidated Statements of Income	7
Consolidating Statements of Income from Operations - Current Year - Quarter	8
Consolidating Statements of Income from Operations - Prior Year - Quarter	8(B)
Consolidating Statements of Income from Operations - Current Year - Year to Date	9
Consolidating Statements of Income from Operations - Prior Year- Year to Date	9(B)
Consolidated Balance Sheets	10
Balance Sheet Data - Segment Highlights	11
Individual Markets
Life Insurance
Income Statements and Operational Data	12
Operational Data and Account Value Roll Forward	13
Annuities
Income Statements and Operational Data	14
Roll Forwards of DAC, VOBA, DFEL and DSI	15
Account Value Roll Forward	16
Account Values, Spread Information, GLB Expense Assessments,
GLB Attributed Fee and GLB Account Values by Type	17
Employer Markets
Defined Contribution
Income Statements and Operational Data	18
Account Value Roll Forward	19
Account Value Roll Forward - By Product and Supplemental Data	20
Executive Benefits
Income Statements and Operational Data	21
Account Value Roll Forward and Supplemental Data	22
Group Protection
Income Statements and Operational Data	23
Investment Management
Income Statements	24
Assets Under Management Roll Forward	25
Assets Under Management Roll Forward (Continued)	25(B)
Lincoln UK
Income Statements	26
Operational Data	27
Other Operations	28
Discontinued Operations	28
Domestic Deposits / Account Balances / Net Flows	29
Consolidated Investment Data
Assets Managed	30
Other Investment Data	31

LFG Analyst Coverage

Second Quarter, 2008

FIRM	ANALYST	PHONE NUMBER
Banc of America Securities	Tamara Kravec	646-855-5212
Sanford C. Bernstein	Suneet Kamath	212-756-4587
Citigroup	Colin Devine	212-816-1682
Credit Suisse	Tom Gallagher	212-538-2010
Deutsche Bank	Darin Arita	212-250-7321
Dowling & Partners	Paul Goulekas	860-676-8600
Fox-Pitt Kelton Cochran Caronia Waller	Mark Finkelstein	312-425-4079
Goldman Sachs & Company	Tom Cholnoky	212-902-3408
JP Morgan	Jimmy Bhullar	212-622-6397
Keefe, Bruyette & Woods	Jeff Schuman	860-722-5902
Langen McAlenney	Bob Glasspiegel	860-724-1203
Lehman Brothers	Eric Berg	212-526-2805
Merrill Lynch	Ed Spehar	212-449-4245
Morgan Stanley	Nigel Dally	212-761-6235
Raymond James & Associates	Steven Schwartz	312-612-7686
UBS	Andrew Kligerman	212-713-2492
Wachovia Securities	John Hall	212-214-8032

Investor inquiries may be directed to:

Jim Sjoreen, Vice President, Investor Relations

Email: Jim.Sjoreen@lfg.com

Voice: (484) 583-1420

Fax: (484) 583-3962

Note: This list is provided for informational purposes only.  LFG does not endorse the analyses, conclusions, or recommendations contained in any report issued by these or any other analysts.

** Statistical data will be available immediately after the release of earnings for each quarter through LNC’s Investor Relations website: http://www.LincolnFinancial.com/investor.

6/30/2008			ii
NOTES
Definitions and Presentation
"Income from Operations," "Operating Revenues" and "Return on Capital" are non-GAAP financial measures and do not replace GAAP revenues
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 associated with the following (see page 6 for additional detail) ("Excluded realized gain (loss)");
		*   Sale or disposal of securities;
		*   Impairments of securities;
		*   Change in the fair value of embedded derivatives within certain reinsurance arrangements and the change in the fair value
		of related trading securities;
		*   Change in the fair value of the embedded derivatives of our guaranteed living benefits within our variable annuities ("GLB")
		net of the change in the fair value of the derivatives we own to hedge the changes in the embedded derivative
		("GLB Net Derivatives Results");
		*   Net difference between the benefit ratio unlocking of SOP 03-1 reserves on our guaranteed death benefit ("GDB") riders
		within our variable annuities and the change in the fair value of the derivatives excluding our expected cost of the hedging
		instruments ("GDB Net Derivative Results"); and
		*   Changes in the fair value of the embedded derivative liabilities related to index call options we may purchase in the future to
		hedge contract holder index allocations applicable to future reset periods for our indexed annuity products as required under
		SFAS 133/157 ("Indexed annuity forward-starting option").
	*    Income (loss) from the initial adoption of changes in accounting principles;
	*    Income (loss) from reserve changes (net of related amortization) on business sold through reinsurance;
	*    Losses on early retirement of debt, including subordinated debt;
	*    Income (loss) from discontinued operations; and
	*    Losses from the impairment of intangible assets.
*	Operating Revenues represent GAAP revenues excluding the following, as applicable:
	*    Excluded realized gain (loss);
	*    Amortization of deferred gains arising from the reserve changes on business sold through reinsurance; and
	*    Revenue adjustments from the initial impact of the adoption of changes in accounting principles.
*	Return on Capital measures the effectiveness of our use of 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 stockholders' equity represents the effect of leveraging on our consolidated results.
Income from Operations, Operating Revenues and Return on Capital are internal measures used by LNC in the management of our operations.
Management believes that these performance measures explain the results of our ongoing operations in a manner that allows for a better
understanding of the underlying trends in our current business because the excluded items are either not related to decisions regarding the
underlying businesses and/or are unpredictable.  Accordingly, Income from Operations and Operating Revenues exclude the effects of any realized
gains (losses) that are not necessarily indicative of current operating fundamentals or future performance of the business segments, and in many
instances, decisions regarding these items do not necessarily relate to the operations of the individual segments.  We report the impact of these
items, net of associated impact of amortization expense of DAC, VOBA, DSI and DFEL and changes in other contract holder funds, within
realized gain (loss).
*	Certain operating and statistical measures are included in this report to provide supplemental data regarding the performance of our
	current business.  These measures include deposits, sales, net flows, first-year premiums, in force, 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 premiums plus 5% of excess premiums received, including UL internal replacements;
	*   Whole Life and Term - first-year paid premiums;
	*   Annuities - deposits from new and existing customers;
	*   Group Protection - annualized first year premiums from new policies; and
	*   Investment Management retail sales and institutional inflows - contributions, transfer in kind purchases
	and reinvested dividends for new and existing accounts.
Our roll forwards of Deferred Acquisition Costs ("DAC") and Value of Business Acquired ("VOBA"), Deferred Sales Inducements ("DSI") and
Deferred Front-End Loads ("DFEL") disclose the net impact of prospective and retrospective unlocking on amortization for these accounts.  This
information helps 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, DSI and the calculations of embedded derivatives and reserves for
	annuity and life insurance products with certain guarantees.  These updates to assumptions result in unlocking that represents an
	increase or decrease to our carrying value of DAC, VOBA, DFEL, DSI and other contract holder funds based upon our updated view of
	future EGPs.  The various assumptions that are reviewed include investment margins, mortality, retention and rider utilization.
*	Retrospective unlocking - On a quarterly basis, we “true-up” our models for actual gross profits and in-force experience for the period.
	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 and Results of Operations - Critical Accounting Policies and
	Estimates” of our 2007 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 revenues.
After-tax operating margin is calculated as income (loss) from operations divided by operating revenues.
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 our television broadcasting, Charlotte radio and sports programming businesses.  The
divestiture of the sports programming business closed on November 30, 2007, the Charlotte radio station business closed on January 31, 2008
and the television broadcasting closed on March 31, 2008.  Accordingly, in the periods prior to the closings, the assets and liabilities of these
businesses not sold have been reclassified as held-for-sale for all periods presented, and are reported within other assets and other liabilities on
our Consolidated Balance Sheets.  The results of operations of these businesses have been reclassified into income (loss) from discontinued
operations for all periods presented on the Financial Highlights, Operating Results Summary and Consolidated Statements of Income pages.
Inter-segment transfer refers to a transfer from Individual Markets - Annuities to Employer Markets - Defined Contribution.
Reclassifications
Subsequent to the first quarter of 2008, we decided to change our non-GAAP measures, Operating Revenues and Income from Operations, to
exclude the effects of any realized gains (losses) that are not necessarily indicative of current operating fundamentals or future performance of the
business segments, and in many instances, decisions regarding these items do not necessarily relate to the operations of the individual
segments.  We believe that our new definitions of Operating Revenues and Income from Operations provide investors with a more valuable measure
of our performance because it better reveals trends in our business.  The items that are now excluded from our operating results that were
previously included are as follows: GLB net derivatives results; indexed annuity forward-starting option; and GDB net derivative results.  See page 6
for more information about these items.
We have restated all periods presented to conform to our new definition of Income from Operations, Operating Revenues and Return on Capital.  In
addition, we have reclassified our derivatives and embedded derivatives related to our GLB, GDB and indexed annuities to realized gain (loss),
which were previously reported within insurance fees, net investment income, interest credited or benefits. The associated amortization expense of
DAC and VOBA (previously reported within underwriting, acquisition, insurance and other expenses), DSI (previously reported within interest
credited), DFEL (previously reported within insurance fees) and changes in contract holder funds (previously reported within benefits) have also
been reclassified to realized gain (loss). These reclassifications had no effect on net income or total stockholders' equity.  Therefore, we have
restated prior periods for these segments to conform to the current presentation.
During the first quarter of 2008, our Institutional Pension business was moved from the Executive Benefits segment to Other Operations.  Therefore,
we have restated prior periods for these segments to conform to the current presentation.

6/30/2008	PAGE 1
Financial Highlights
Unaudited (in millions, except per share data)

	For the Quarters Ended June 30,												For the Six Months Ended June 30,
							Change												Change
	2008			2007			Amount			%			2008			2007			Amount			%
Income from Operations - By Segment
Individual Life Insurance	$	152.6		$	176.4		$	(23.8	)		-13.5	%	$	298.1		$	343.0		$	(44.9	)		-13.1	%
Individual Annuities		116.2			123.4			(7.2	)		-5.8	%		234.0			240.0			(6.0	)		-2.5	%
Total Individual Markets		268.8			299.8			(31.0	)		-10.3	%		532.1			583.0			(50.9	)		-8.7	%
Defined Contribution		41.2			47.3			(6.1	)		-12.9	%		81.6			97.0			(15.4	)		-15.9	%
Executive Benefits		11.0			10.8			0.2			1.9	%		22.9			22.7			0.2			0.9	%
Group Protection		32.2			29.0			3.2			11.0	%		58.5			52.1			6.4			12.3	%
Total Employer Markets		84.4			87.1			(2.7	)		-3.1	%		163.0			171.8			(8.8	)		-5.1	%
Investment Management		15.0			11.3			3.7			32.7	%		27.1			27.5			(0.4	)		-1.5	%
Lincoln UK		18.0			11.7			6.3			53.8	%		28.6			22.5			6.1			27.1	%
Other Operations		(44.4	)		(36.2	)		(8.2	)		-22.7	%		(86.6	)		(64.1	)		(22.5	)		-35.1	%
Total Income From Operations (1)		341.8			373.7			(31.9	)		-8.5	%		664.2			740.7			(76.5	)		-10.3	%
Excluded realized gain (loss), after-tax  (2)		(78.2	)		3.9			(82.1	)	NM				(107.7	)		25.5			(133.2	)	NM
Income (loss) from reserve changes (net of related amortization) on business sold through reinsurance, after-tax		0.4			(7.9	)		8.3			105.1	%		0.8			(7.8	)		8.6			110.3	%
Impairment of intangibles, after-tax (3)		(139.0	)		-			(139.0	)	NM				(139.0	)		-			(139.0	)	NM
Income (loss) from discontinued operations, after-tax (4)		(0.3	)		6.3			(6.6	)	NM				(4.5	)		14.0			(18.5	)	NM
Net Income	$	124.7		$	376.0		$	(251.3	)		-66.8	%	$	413.8		$	772.4		$	(358.6	)		-46.4	%
Earnings Per Share (Diluted) (5)
Income from operations (1)	$	1.32		$	1.36		$	(0.04	)		-2.9	%	$	2.54		$	2.67		$	(0.13	)		-4.9	%
Excluded realized gain (loss), after-tax  (2)	��	(0.30	)		0.02			(0.32	)	NM				(0.41	)		0.10			(0.51	)	NM
Income (loss) from reserve changes (net of related amortization) on business sold through reinsurance, after-tax		-			(0.03	)		0.03			100.0	%		-			(0.03	)		0.03			100.0	%
Impairment of intangibles, after-tax (3)		(0.54	)		-			(0.54	)	NM				(0.53	)		-			(0.53	)	NM
Income (loss) from discontinued operations, after-tax  (4)		-			0.02			(0.02	)		-100.0	%		(0.02	)		0.05			(0.07	)	NM
Net Income	$	0.48		$	1.37		$	(0.89	)		-65.0	%	$	1.58		$	2.79		$	(1.21	)		-43.4	%
Operating Revenues - By Segment
Individual Life Insurance	$	1,020.7		$	957.4		$	63.3			6.6	%	$	2,008.2		$	1,928.9		$	79.3			4.1	%
Individual Annuities		618.7			623.7			(5.0	)		-0.8	%		1,241.3			1,214.0			27.3			2.2	%
Total Individual Markets		1,639.4			1,581.1			58.3			3.7	%		3,249.5			3,142.9			106.6			3.4	%
Defined Contribution		239.4			252.0			(12.6	)		-5.0	%		477.1			498.8			(21.7	)		-4.4	%
Executive Benefits		65.4			66.1			(0.7	)		-1.1	%		131.0			135.4			(4.4	)		-3.2	%
Group Protection		424.9			391.0			33.9			8.7	%		824.3			751.4			72.9			9.7	%
Total Employer Markets		729.7			709.1			20.6			2.9	%		1,432.4			1,385.6			46.8			3.4	%
Investment Management		124.3			151.0			(26.7	)		-17.7	%		244.6			301.1			(56.5	)		-18.8	%
Lincoln UK		97.9			92.6			5.3			5.7	%		183.5			183.3			0.2			0.1	%
Other Operations		110.0			123.6			(13.6	)		-11.0	%		227.9			232.3			(4.4	)		-1.9	%
Total Operating Revenues		2,701.3			2,657.4			43.9			1.7	%		5,337.9			5,245.2			92.7			1.8	%
Excluded realized gain (loss), pre-tax (2)		(120.3	)		5.7			(126.0	)	NM				(165.6	)		38.7			(204.3	)	NM
Amortization of deferred gains arising from reserve changes on business sold through reinsurance, pre-tax		0.7			7.8			(7.1	)		-91.0	%		1.4			8.2			(6.8	)		-82.9	%
Total Revenues	$	2,581.7		$	2,670.9		$	(89.2	)		-3.3	%	$	5,173.7		$	5,292.1		$	(118.4	)		-2.2	%

(1)  Income from operations includes restructuring charges, after-tax, of $0.8 million, or -0- cents per share, and $4.0 million, or 1 cent per share, for the quarters ended June 30, 2008 and 2007, respectively.

(2) See page 6 for detail.

(3) We recorded goodwill impairment of $83.0 million and impairment of our FCC license intangible assets of $86.6 million, pre-tax, and $56.0 million, after-tax, on our remaining radio clusters.  These impairments were attributable primarily to declines in advertising revenues for the entire radio market, which resulted in declines in current and forecasted broadcast cash flows.  Therefore, we updated our impairment review, outside of our annual process normally completed as of October 1 each year, as of April 1, 2008.

(4) Includes discontinued operations and the loss on disposal.  See Discontinued Operations on page 28 for details.

(5) The income used in the calculation of our diluted earnings per share is reduced by minority interest adjustments related to outstanding stock options under the Delaware Investments U.S., Inc stock option incentive plan. See page 5 for detail of minority interest.

6/30/2008													PAGE 2
Financial Highlights
Unaudited (billions of dollars)
Operational Data by Segment	For the Quarters Ended June 30,												For the Six Months Ended June 30,
							Change												Change
	2008			2007			Amount			%			2008			2007			Amount			%
Individual Markets - Life Insurance
Sales (in millions) (1)		152.9			180.0			(27.1	)		-15.1	%		298.3			383.5			(85.2	)		-22.2	%
Life insurance in force		522.777			512.195			10.582			2.1	%		522.777			512.195			10.582			2.1	%
Account values		28.077			27.465			0.612			2.2	%		28.077			27.465			0.612			2.2	%
Individual Markets - Annuities
Gross deposits	$	3.436		$	3.277		$	0.159			4.9	%	$	6.462		$	6.098		$	0.364			6.0	%
Net flows		1.589			1.137			0.452			39.8	%		2.770			1.892			0.878			46.4	%
Account values (gross)		73.653			73.038			0.615			0.8	%		73.653			73.038			0.615			0.8	%
Account values (net of reinsurance)		72.398			71.440			0.958			1.3	%		72.398			71.440			0.958			1.3	%
Employer Markets - Defined Contribution
Gross deposits (2)	$	1.421		$	1.273		$	0.148			11.6	%	$	2.972		$	2.760		$	0.212			7.7	%
Net flows		0.237			0.073			0.164			224.7	%		0.517			0.294			0.223			75.9	%
Account values - annuities		27.489			29.420			(1.931	)		-6.6	%		27.489			29.420			(1.931	)		-6.6	%
Alliance and Smart Future Mutual Funds		7.553			6.543			1.010			15.4	%		7.553			6.543			1.010			15.4	%
Account values including Alliance and Smart Future Mutual Funds		35.042			35.963			(0.921	)		-2.6	%		35.042			35.963			(0.921	)		-2.6	%
Employer Markets - Executive Benefits
COLI/BOLI sales (in millions)		12.9			13.6			(0.7	)		-5.1	%		41.1			34.0			7.1			20.9	%
Life insurance in force		14.939			14.809			0.130			0.9	%		14.939			14.809			0.130			0.9	%
Account values		4.526			4.353			0.173			4.0	%		4.526			4.353			0.173			4.0	%
Employer Markets - Group Protection
Annualized sales (in millions)		64.6			62.2			2.4			3.9	%		118.7			122.8			(4.1	)		-3.3	%
Loss ratio (3)		70.2	%		70.8	%	NM			NM				70.6	%		71.8	%	NM			NM
Investment Management
Retail sales	$	2.596		$	3.275		$	(0.679	)		-20.7	%	$	6.091		$	6.877		$	(0.786	)		-11.4	%
Retail net flows		(0.937	)		(0.275	)		(0.662	)	NM				(1.592	)		(0.042	)		(1.550	)	NM
Institutional inflows		0.910			2.876			(1.966	)		-68.4	%		2.140			5.307			(3.167	)		-59.7	%
Institutional net flows		(0.535	)		(0.148	)		(0.387	)	NM				(1.045	)		(0.470	)		(0.575	)	NM
Total sales and inflows		3.506			6.151			(2.645	)		-43.0	%		8.231			12.184			(3.953	)		-32.4	%
Total net flows		(1.472	)		(0.423	)		(1.049	)	NM				(2.637	)		(0.512	)		(2.125	)	NM
Assets under management - retail and institutional		75.691			97.725			(22.034	)		-22.5	%		75.691			97.725			(22.034	)		-22.5	%
Assets under management - general account		65.997			66.423			(0.426	)		-0.6	%		65.997	��		66.423			(0.426	)		-0.6	%
Assets under management - total segment		141.688			164.148			(22.460	)		-13.7	%		141.688			164.148			(22.460	)		-13.7	%
Consolidated
Domestic retail deposits	$	7.739		$	8.019		$	(0.280	)		-3.5	%	$	15.449		$	16.234		$	(0.785	)		-4.8	%
Domestic retail account balances		172.925			177.870			(4.945	)		-2.8	%		172.925			177.870			(4.945	)		-2.8	%
Domestic retail net flows		1.491			1.876			(0.385	)		-20.5	%		2.850			3.704			(0.854	)		-23.1	%
Domestic deposits		8.615			10.707			(2.092	)		-19.5	%		17.463			21.242			(3.779	)		-17.8	%
Domestic net flows		1.008			1.702			(0.694	)		-40.8	%		1.887			3.256			(1.369	)		-42.0	%
Assets under management		220.615			245.028			(24.413	)		-10.0	%		220.615			245.028			(24.413	)		-10.0	%

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

(2) Includes deposits for mutual funds, which are not included in separate account liabilities on our Consolidated Balance Sheets.

(3) Represents combined loss ratio for life, disability and dental businesses.

6/30/2008	PAGE 3
Financial Highlights
Unaudited (millions of dollars)

	For the Quarters Ended June 30,												For the Six Months Ended June 30,
							Change												Change
	2008			2007			Amount			%			2008			2007			Amount			%
Balance Sheet Assets - End-of-Period	$	184,281.2		$	187,650.1		$	(3,368.9	)		-1.8	%	$	184,281.2		$	187,650.1		$	(3,368.9	)		-1.8	%
Stockholders' Equity
Beginning-of-period (including AOCI)	$	11,086.3		$	12,032.2		$	(945.9	)				$	11,718.4		$	12,201.0		$	(482.6	)
End-of-period (including AOCI)		10,497.7			11,835.7			(1,338.0	)					10,497.7			11,835.7			(1,338.0	)
End-of-period (excluding AOCI)		11,306.0			11,686.4			(380.4	)					11,306.0			11,686.4			(380.4	)
Average equity (excluding AOCI)		11,357.0			11,529.4			(172.4	)					11,403.8			11,504.8			(101.0	)
Return on Equity
Net income/average equity (excluding AOCI)		4.4	%		13.0	%								7.3	%		13.4	%
Income from operations/average equity (excluding AOCI)		12.0	%		13.0	%								11.6	%		12.9	%
Return on Capital
Income from operations/average capital		9.4	%		10.5	%								9.2	%		10.4	%
Common Stock Outstanding
Average for the period - diluted		259.6			274.4			(14.8	)		-5.4	%		261.2			276.9			(15.7	)		-5.7	%
End-of-period - assuming conversion of preferreds		257.0			271.6			(14.6	)		-5.4	%		257.0			271.6			(14.6	)		-5.4	%
End-of-period - diluted		257.8			274.5			(16.7	)		-6.1	%		257.8			274.5			(16.7	)		-6.1	%
Book value (including AOCI)	$	40.85		$	43.58		$	(2.73	)		-6.3	%	$	40.85		$	43.58		$	(2.73	)		-6.3	%
Book value (excluding AOCI)		43.99			43.03			0.96			2.2	%		43.99			43.03		$	0.96			2.2	%
Cash Returned to Shareholders
Share repurchase - dollar amount (1)	$	139.8		$	-		$	139.8					$	425.5		$	511.7		$	(86.2	)
Dividends declared		106.6			107.6			(1.0	)					214.2			214.3			(0.1	)
Total Cash Returned to Shareholders	$	246.4		$	107.6		$	138.8					$	639.7		$	726.0		$	(86.3	)
Share repurchase - number of shares		2.63			-			2.63		NM				8.08			7.22			0.87			12.0	%
Dividend declared on common stock - per share	$	0.415		$	0.395		$	0.020			5.1	%	$	0.830		$	0.790		$	0.040			5.1	%
Dividend payout ratio (2)		86.5	%		28.8	%								52.5	%		28.3	%
Annualized yield (3)		3.7	%		2.2	%								3.7	%		2.2	%

Comprehensive Income (Loss)
Net income	$	124.7		$	376.0		$	413.8		$	772.4
Net unrealized loss on available-for-sale securities		(487.2	)		(511.5	)		(1,025.3	)		(464.6	)
Losses on derivatives		(2.6	)		(11.4	)		(10.9	)		(15.3	)
Foreign currency translation		2.8			13.0			1.6			16.2
Funded status of employee benefit plans		0.4			(0.5	)		1.0			(0.2	)
Comprehensive Income (Loss)	$	(361.9	)	$	(134.4	)	$	(619.8	)	$	308.5
Ratios
Debt to total capitalization (4)		21.7	%		19.7	%		21.7	%		19.7	%
Debt to equity (4)		27.6	%		24.6	%		27.6	%		24.6	%

	Ratings as of July 29, 2008
	A.M. Best		Fitch	Moody's	Standard & Poor's
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) Includes cash repurchases that were not settled as of June 30, 2008 of $25.0 million for both the three and six months ended June 30, 2008.
(2)  Indicated dividend divided by net income.
(3)  Indicated dividend divided by the closing price.
(4) Equity used in calculation excludes AOCI 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.

6/30/2008	PAGE 4
Consolidated Operating Expense Detail
Unaudited (in millions)

		For the Three Months Ended																		For the Six Months Ended
		June			Sept.			Dec.			March			June			%			June			June			%
		2007			2007			2007			2008			2008			Change			2007			2008			Change
Commissions	��	$	462.9		$	470.9		$	501.9		$	426.7		$	434.3			-6.2	%	$	909.5		$	861.0			-5.3	%
General and Administrative Expenses
General and administrative expenses			432.4			418.2			432.7			400.6			401.1			-7.2	%		823.3			801.7			-2.6	%
Merger-related expenses			23.8			21.9			23.6			13.8			14.9			-37.4	%		33.9			28.7			-15.3	%
Total General and Administrative Expenses Excluding Broker-Dealer			456.2			440.1			456.3			414.4			416.0			-8.8	%		857.2			830.4			-3.1	%
Communications expenses			15.2			13.2			13.5			15.5			15.4			1.3	%		29.8			30.9			3.7	%
Restructuring charges			6.2			7.4			2.9			0.9			1.2			-80.6	%		10.0			2.1			-79.0	%
Taxes, licenses and fees			51.8			52.4			48.6			62.3			52.3			1.0	%		117.1			114.6			-2.1	%
Interest and debt expense			73.1			68.2			80.3			75.4			64.8			-11.4	%		135.5			140.2			3.5	%
Total Commissions and Expenses Incurred			1,065.4			1,052.2			1,103.5			995.2			984.0			-7.6	%		2,059.1			1,979.2			-3.9	%
Less: Commissions and Expenses Capitalized			(505.0	)		(511.5	)		(554.4	)		(456.5	)		(464.9	)		7.9	%		(992.4	)		(921.4	)		7.2	%
Amortization
Amortization of DAC and VOBA, net of interest (1)			233.4			283.4			273.0			255.2			309.0			32.4	%		508.6			564.2			10.9	%
Amortization of intangibles			2.5			2.6			2.5			1.5			1.7			-32.0	%		5.1			3.2			-37.3	%
Total Amortization			235.9			286.0			275.5			256.7			310.7			31.7	%		513.7			567.4			10.5	%
Broker-Dealer Commissions and G&A			92.8			91.8			100.5			89.2			85.1			-8.3	%		180.0			174.3			-3.2	%
Total		$	889.1		$	918.5		$	925.1		$	884.6		$	914.9			2.9	%	$	1,760.4		$	1,799.5			2.2	%
Merger-Related Expenses (2)
Severance and employee-related charges		$	6.6		$	5.6		$	6.2		$	3.1		$	2.5			-62.1	%	$	9.6		$	5.6			-41.7	%
Systems integration and related expenses			17.7			17.9			15.1			9.3			12.0			-32.2	%		23.3			21.3			-8.6	%
Other expenses			5.7			5.8			6.6			2.3			1.6			-71.9	%		11.1			3.9			-64.9	%
Total Merger-Related Expenses		$	30.0		$	29.3		$	27.9		$	14.7		$	16.1			-46.3	%	$	44.0		$	30.8			-30.0	%
(1) In the second quarter of 2007, we recognized certain adjustments that reduced DAC amortization by $23 million.
(2) Represents merger-related expenses included in general and administrative expenses and restructuring charges.

6/30/2008	PAGE 5
Operating Results Summary
Unaudited (millions of dollars)

	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Operating Revenues
Individual Life Insurance (1)	$	957.4		$	992.2		$	1,002.1		$	987.5		$	1,020.7			6.6	%	$	1,928.9		$	2,008.2			4.1	%
Individual Annuities		623.7			647.0			672.3			622.6			618.7			-0.8	%		1,214.0			1,241.3			2.2	%
Individual Markets		1,581.1			1,639.2			1,674.4			1,610.1			1,639.4			3.7	%		3,142.9			3,249.5			3.4	%
Defined Contribution		252.0			243.4			243.3			237.7			239.4			-5.0	%		498.8			477.1			-4.4	%
Executive Benefits		66.1			64.2			66.1			65.6			65.4			-1.1	%		135.4			131.0			-3.2	%
Group Protection		391.0			367.5			380.6			399.4			424.9			8.7	%		751.4			824.3			9.7	%
Employer Markets		709.1			675.1			690.0			702.7			729.7			2.9	%		1,385.6			1,432.4			3.4	%
Investment Management		151.0			150.1			139.0			120.3			124.3			-17.7	%		301.1			244.6			-18.8	%
Lincoln UK		92.6			88.6			98.3			85.6			97.9			5.7	%		183.3			183.5			0.1	%
Other Operations		123.6			112.9			128.0			117.9			110.0			-11.0	%		232.3			227.9			-1.9	%
Total Operating Revenues		2,657.4			2,665.9			2,729.7			2,636.6			2,701.3			1.7	%		5,245.2			5,337.9			1.8	%
Excluded realized gain (loss), pre-tax (2)		5.7			(65.7	)		(147.9	)		(45.3	)		(120.3	)	NM				38.7			(165.6	)	NM
Amortization of deferred gains arising from reserve changes on business sold through reinsurance, pre-tax		7.8			0.6			0.7			0.7			0.7			-91.0	%		8.2			1.4			-82.9	%
Total Revenues	$	2,670.9		$	2,600.8		$	2,582.5		$	2,592.0		$	2,581.7			-3.3	%	$	5,292.1		$	5,173.7			-2.2	%
Income from Operations (3)
Individual Life Insurance	$	176.4		$	173.6		$	158.8		$	145.5		$	152.6			-13.5	%	$	343.0		$	298.1			-13.1	%
Individual Annuities		123.4			125.9			118.9			117.8			116.2			-5.8	%		240.0			234.0			-2.5	%
Individual Markets		299.8			299.5			277.7			263.3			268.8			-10.3	%		583.0			532.1			-8.7	%
Defined Contribution		47.3			41.2			43.1			40.4			41.2			-12.9	%		97.0			81.6			-15.9	%
Executive Benefits		10.8			8.9			11.9			11.9			11.0			1.9	%		22.7			22.9			0.9	%
Group Protection		29.0			33.2			28.2			26.3			32.2			11.0	%		52.1			58.5			12.3	%
Employer Markets		87.1			83.3			83.2			78.6			84.4			-3.1	%		171.8			163.0			-5.1	%
Investment Management		11.3			21.8			27.0			12.1			15.0			32.7	%		27.5			27.1			-1.5	%
Lincoln UK		11.7			10.3			12.7			10.7			18.0			53.8	%		22.5			28.6			27.1	%
Other Operations		(36.2	)		(49.6	)		(59.4	)		(42.3	)		(44.4	)		-22.7	%		(64.1	)		(86.6	)		-35.1	%
Income from Operations (3)		373.7			365.3			341.2			322.4			341.8			-8.5	%		740.7			664.2			-10.3	%
Excluded realized gain (loss), after-tax (2)		3.9			(42.7	)		(102.3	)		(29.5	)		(78.2	)	NM				25.5			(107.7	)	NM
Income (loss) from reserve changes (net of related amortization) on business sold through reinsurance, after-tax		(7.9	)		0.4			0.4			0.4			0.4			105.1	%		(7.8	)		0.8			110.3	%
Impairment of intangibles, after-tax (4)		-			-			-			-			(139.0	)	NM				-			(139.0	)	NM
Income (loss) from discontinued operations, after-tax (5)		6.3			6.6			(126.8	)		(4.2	)		(0.3	)	NM				14.0			(4.5	)	NM
Net Income	$	376.0		$	329.6		$	112.5		$	289.1		$	124.7			-66.8	%	$	772.4		$	413.8			-46.4	%

	For the Three Months Ended															For the Six Months Ended
	June			Sept.			Dec.			March			June			June			June
	2007			2007			2007			2008			2008			2007			2008
Stockholders' Equity
Beginning-of-period (including AOCI)	$	12,032.2		$	11,835.7		$	11,962.9		$	11,718.4		$	11,086.3		$	12,201.0		$	11,718.4
End-of-period (including AOCI)		11,835.7			11,962.9			11,718.4			11,086.3			10,497.7			11,835.7			10,497.7
End-of-period (excluding AOCI)		11,686.4			11,766.0			11,493.1			11,408.0			11,306.0			11,686.4			11,306.0
Average equity (excluding AOCI)		11,529.4			11,726.3			11,629.6			11,450.5			11,357.0			11,504.8			11,403.8
Minority Interest	$	0.3		$	0.2		$	1.0		$	0.3		$	0.2		$	0.7		$	0.5
Common Shares Outstanding
Average for the period - diluted		274.4			272.5			269.4			262.8			259.6			276.9			261.2
End-of-period - diluted		274.5			271.7			266.2			260.5			257.8			274.5			257.8
Per Share Data (Diluted) (6)
Net income	$	1.37		$	1.21		$	0.41		$	1.10		$	0.48		$	2.79		$	1.58
Income from operations (3)		1.36			1.34			1.26			1.23			1.32			2.67			2.54
Stockholders' Equity Per Share
Stockholders' equity (including AOCI)	$	43.58		$	44.41		$	44.32		$	42.74		$	40.85		$	43.58		$	40.85
Stockholders' equity (excluding AOCI)		43.03			43.67			43.47			43.98			43.99			43.03			43.99
Dividends declared (common stock)		0.395			0.395			0.415			0.415			0.415			0.790			0.830
Return on Equity
Net income/average equity		13.0	%		11.2	%		3.9	%		10.1	%		4.4	%		13.4	%		7.3	%
Income from operations/average equity		13.0	%		12.5	%		11.7	%		11.3	%		12.0	%		12.9	%		11.6	%
Market Value of Common Stock
Highest price	$	74.72		$	72.28		$	70.66		$	58.11		$	56.80		$	74.72		$	58.11
Lowest price		66.90			54.40			55.84			45.50			45.18			64.29			45.18
Closing price		70.95			65.97			58.22			52.00			45.32			70.95			45.32
(1) In the second quarter of 2007, we recognized certain adjustments that reduced operating revenues by $41 million. There were reductions to expenses that offset most of this reduction in revenues.
(2) See page 6 for detail.
(3) Income from operations includes after-tax restructuring charges of $0.8 million, or -0- cents per share, for the second quarter of 2008, $0.6 million or -0- cents per share, for the first quarter of 2008, $1.9 million, or 1 cent per share, for the fourth quarter of 2007, $4.8 million, or 2 cents per share, for the third quarter of 2007 and $4.0 million, or 1 cent per share, for the second quarter of 2007.
(4) See page 1 for detail.
(5) Includes discontinued operations and the loss on disposition. See Discontinued Operations on page 28 for details.
(6) The income used in the calculation of our diluted earnings per share is reduced by minority interest adjustments related to outstanding stock options under the Delaware Investments U.S., Inc stock option incentive plan.

6/30/2008	PAGE 6
Details Underlying Realized Gain (Loss), After-DAC (1)
Unaudited (millions of dollars)

	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Pre-Tax
Operating realized gain (2):
Indexed annuity net derivatives results (3)	$	1.2		$	0.2		$	(0.1	)	$	(1.4	)	$	(0.6	)	NM			$	2.2		$	(2.0	)	NM
GLB (4)		1.4			1.6			1.8			5.8			10.4		NM				2.2			16.2		NM
GDB hedge cost (5)		(1.3	)		(0.8	)		0.5			5.9			2.6			300.0	%		(1.7	)		8.5		NM
Total operating realized gain		1.3			1.0			2.2			10.3			12.4		NM				2.7			22.7		NM
Realized gain (loss) related to investments (6)		(8.7	)		(35.4	)		(108.8	)		(41.1	)		(124.6	)	NM				17.8			(165.7	)	NM
Gain (loss) on certain reinsurance derivative/trading securities (7)		4.0			(1.1	)		(0.8	)		0.4			1.5			-62.5	%		3.8			1.9			-50.0	%
GLB net derivatives results (8)		4.8			(23.1	)		(37.4	)		(6.7	)		1.4			-70.8	%		13.2			(5.3	)	NM
Indexed annuity forward-starting option (9)		4.9			(6.2	)		(6.9	)		4.8			2.1			-57.1	%		3.0			6.9			130.0	%
GDB net derivative results (5)		0.7			0.1			(0.2	)		(5.2	)		(2.5	)	NM				0.9			(7.7	)	NM
Gain on sale of subsidiaries/businesses		-			-			6.2			2.5			1.8		NM				-			4.3		NM
Total excluded realized gain (loss)		5.7			(65.7	)		(147.9	)		(45.3	)		(120.3	)	NM				38.7			(165.6	)	NM
Total realized gain (loss)	$	7.0		$	(64.7	)	$	(145.7	)	$	(35.0	)	$	(107.9	)	NM			$	41.4		$	(142.9	)	NM
After-Tax
Operating realized gain (2):
Indexed annuity net derivatives results (3)	$	0.8		$	0.1		$	(0.1	)	$	(0.9	)	$	(0.4	)	NM			$	1.4		$	(1.3	)	NM
GLB (4)		0.9			1.0			1.2			3.8			6.8		NM				1.4			10.5		NM
GDB hedge cost (5)		(0.8	)		(0.5	)		0.3			3.8			1.7		NM				(1.1	)		5.5		NM
Total operating realized gain		0.9			0.6			1.4			6.7			8.1		NM				1.7			14.7		NM
Realized gain (loss) related to investments (6)		(4.9	)		(23.2	)		(71.4	)		(27.1	)		(80.6	)	NM				12.3			(107.7	)	NM
Gain (loss) on certain reinsurance derivative/trading securities (7)		2.1			(0.5	)		(0.3	)		0.6			0.6			-71.4	%		2.1			1.2			-42.9	%
GLB net derivatives results (8)		3.1			(15.1	)		(24.2	)		(4.2	)		0.9			-71.0	%		8.5			(3.3	)	NM
Indexed annuity forward-starting option (9)		3.2			(4.0	)		(4.5	)		3.1			1.4			-56.3	%		2.0			4.5			125.0	%
GDB net derivative results (5)		0.4			0.1			(0.1	)		(3.4	)		(1.6	)	NM				0.6			(5.0	)	NM
Gain on sale of subsidiaries/businesses		-			-			(1.8	)		1.5			1.1		NM				-			2.6		NM
Total excluded realized gain (loss)		3.9			(42.7	)		(102.3	)		(29.5	)		(78.2	)	NM				25.5			(107.7	)	NM
Total realized gain (loss)	$	4.8		$	(42.1	)	$	(100.9	)	$	(22.8	)	$	(70.1	)	NM			$	27.2		$	(93.0	)	NM

(1)  DAC refers to the associated amortization expense of DAC, VOBA, DSI, and DFEL and changes in other contract holder funds.

(2)  We exclude from our definitions of income from operations and operating revenues any realized gains (losses) that are not necessarily indicative of current operating fundamentals or future performance of the business segments, and in many instances, decisions regarding these items do not necessarily relate to the operations of the individual segments.

(3) The net difference between the change in the fair value of the S&P 500 Index® call options that we hold and the change in the fair value of the embedded derivative liabilities of our indexed annuities products.

(4) The portion of the GLB rider fees calculated as the attributed fees in excess of the net valuation premium.  Net valuation premium represents a level portion of rider fees required to fund potential living benefit claims.  The attributed fees are the fees used in the calculation of the embedded derivative and represent net valuation premium plus a margin for risk/profit, including the non-performance risk factor required by SFAS 157 benefit costs.

(5) We include the change in the fair value of the derivatives that offsets the benefit ratio unlocking of our SOP 03-1 reserves on our GDB riders, including our expected cost of the hedging instruments in operating realized gain (loss).  We exclude from our definition of income from operations the net difference between the benefit ratio unlocking of SOP 03-1 reserves on our GDB riders and the change in the fair value of the derivatives excluding our expected cost of the hedging instruments.

(6) See page 31 for detail.

(7) Changes in the fair values of total return swaps (embedded derivatives) related to various modified coinsurance and coinsurance with funds withheld reinsurance arrangements that have contractual returns related to various assets and liabilities associated with these arrangements.  Changes in the fair value of these derivatives are offset by the change in fair value of trading securities in the portfolios that support these arrangements.

(8) Represents the net difference in the change in the fair value of the embedded derivative liabilities of our GLB products and the change in the fair value of the derivative instruments we own to hedge.  This includes the cost of hedging.  Losses from the impact of the initial adoption of SFAS 157 were $33.5 million, pre-tax, and $21.8 million, after-tax, in the first quarter of 2008. Our hedge performance after-DAC and after-tax, excluding DAC unlocking and changes in the non-performance risk factor, was an estimated $11 million and $4 million for the three months ended March 31, 2008 and June 30, 2008 respectively.

(9) Changes in the fair value of embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products as required under SFAS 133/157.  In addition, $9.6 million, pre-tax, and $6.3 million, after-tax, is included in the first quarter of 2008 due to the initial impact of adopting SFAS 157.

6/30/2008	PAGE 7
Consolidated Statements of Income
Unaudited (in millions)

	For the Three Months Ended																	For the Six Months Ended
	June		Sept.			Dec.			March			June			%			June		June			%
	2007		2007			2007			2008			2008			Change			2007		2008			Change
Revenues
Insurance premiums	$	488.9	$	491.1		$	508.2		$	508.8		$	529.7			8.3	%	$	947.8	$	1,038.5			9.6	%
Surrender charges		28.1		25.6			25.1			27.2			25.6			-8.9	%		55.0		52.9			-3.8	%
Mortality assessments (1)		299.6		320.7			328.4			330.8			337.3			12.6	%		610.8		668.1			9.4	%
Expense assessments (1)		413.9		489.6			495.1			454.1			479.4			15.8	%		839.8		933.5			11.2	%
Investment advisory fees		92.7		89.0			87.7			76.2			75.8			-18.2	%		183.0		152.0			-16.9	%
Net investment income		1,133.2		1,061.6			1,093.7			1,065.4			1,076.8			-5.0	%		2,223.0		2,142.2			-3.6	%
Realized gain (loss)  (2)		7.0		(64.7	)		(145.7	)		(35.0	)		(107.9	)	NM				41.4		(142.9	)	NM
Amortization of deferred gains on business sold through reinsurance		26.4		19.3			19.3			19.1			19.1			-27.7	%		45.3		38.2			-15.7	%
Other revenues and fees		181.1		168.6			170.7			145.3			145.9			-19.4	%		346.0		291.2			-15.8	%
Total Revenues		2,670.9		2,600.8			2,582.5			2,592.0			2,581.7			-3.3	%		5,292.1		5,173.7			-2.2	%
Benefits and Expenses
Benefits (1)		650.7		622.7			696.2			677.5			684.6			5.2	%		1,243.4		1,362.1			9.5	%
Interest credited to contract holder funds		606.2		611.3			618.7			611.7			612.7			1.1	%		1,205.4		1,224.4			1.6	%
Operating and acquisition expenses		764.2		797.9			796.2			746.8			797.9			4.4	%		1,507.8		1,544.7			2.4	%
Taxes, licenses and fees		51.8		52.4			48.6			62.3			52.3			1.0	%		117.1		114.6			-2.1	%
Interest and debt expense		73.1		68.2			80.3			75.4			64.8			-11.4	%		135.5		140.2			3.5	%
Impairment of intangibles (3)		-		-			-			-			169.6		NM				-		169.6		NM
Total Benefits and Expenses		2,146.1		2,152.6			2,240.0			2,173.7			2,381.9			11.0	%		4,209.2		4,555.6			8.2	%
Income from continuing operations before taxes		524.8		448.2			342.5			418.3			199.8			-61.9	%		1,082.9		618.1			-42.9	%
Federal income taxes		155.1		125.2			103.2			125.0			74.8			-51.8	%		324.4		199.8			-38.4	%
Income From Continuing Operations		369.7		323.0			239.3			293.3			125.0			-66.2	%		758.5		418.3			-44.9	%
Income (loss) from discontinued operations, net of federal income taxes (4)		6.3		6.6			(126.8	)		(4.2	)		(0.3	)	NM				13.9		(4.5	)	NM
Net Income	$	376.0	$	329.6		$	112.5		$	289.1		$	124.7			-66.8	%	$	772.4	$	413.8			-46.4	%
Earnings Per Share (Diluted) (5)
Income from continuing operations	$	1.35	$	1.19		$	0.89		$	1.12		$	0.48			-64.4	%	$	2.74	$	1.60			-41.6	%
Income (loss) from discontinued operations, net of federal income taxes (4)		0.02		0.02			(0.47	)		(0.02	)		-			-100.0	%		0.05		(0.02	)	NM
Net Income	$	1.37	$	1.21		$	0.42		$	1.10		$	0.48			-65.0	%	$	2.79	$	1.58			-43.4	%

Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	8,534.7		$	9,100.6		$	9,337.0		$	9,579.8		$	9,995.5		$	8,420.4		$	9,579.8
Cumulative effect of adoption of SOP 05-1		-			-			-			-			-			(66.1	)		-
Deferrals		505.0			511.5			554.4			456.5			464.9			992.4			921.4
Amortization, net of interest: (1)
Unlocking		25.2			7.8			17.0			(10.9	)		(17.5	)		39.7			(28.4	)
Other amortization		(258.6	)		(291.2	)		(290.0	)		(244.3	)		(291.5	)		(548.3	)		(535.8	)
Deferrals, net of amortization included in operating and acquisition expenses		271.6			228.1			281.4			201.3			155.9			483.8			357.2
Adjustment related to realized (gains) losses on available-for-sale securities and derivatives		(12.8	)		21.1			95.6			(1.4	)		4.8			(37.1	)		3.3
Adjustment related to unrealized (gains) losses on available-for-sale securities and derivatives		290.8			(27.9	)		(111.3	)		216.6			449.3			265.3			666.0
Foreign currency translation adjustment		16.3			15.1			(22.9	)		(0.8	)		2.6			20.3			1.8
Business acquired		-			-			-			-			-			14.0			-
Balance at End-of-Period	$	9,100.6		$	9,337.0		$	9,579.8		$	9,995.5		$	10,608.1		$	9,100.6		$	10,608.1
Roll Forward of DFEL
Balance at beginning-of-period	$	1,017.9		$	1,105.8		$	1,128.1		$	1,183.1		$	1,235.6		$	976.9		$	1,183.1
Cumulative effect of adoption of SOP 05-1		-			-			-			-			-			(2.0	)		-
Deferrals		125.9			96.9			112.5			102.0			104.1			203.1			206.1
Amortization, net of interest:
Unlocking		6.8			(30.8	)		(0.4	)		(3.2	)		(10.4	)		8.5			(13.6	)
Other amortization		(52.7	)		(52.5	)		(47.8	)		(46.6	)		(48.7	)		(89.4	)		(95.3	)
Deferrals, net of amortization included in expense assessments		80.0			13.6			64.3			52.2			45.0			122.2			97.2
Adjustment related to realized (gains) losses on available-for-sale securities and derivatives		(0.2	)		1.2			2.0			0.8			(0.5	)		(1.4	)		0.3
Foreign currency translation adjustment		8.1			7.5			(11.3	)		(0.5	)		1.4			10.1			0.9
Balance at End-of-Period	$	1,105.8		$	1,128.1		$	1,183.1		$	1,235.6		$	1,281.5		$	1,105.8		$	1,281.5
Roll Forward of DSI
Balance at beginning-of-period	$	206.4		$	225.0		$	249.1		$	279.2		$	297.6		$	193.8		$	279.2
Cumulative effect of adoption of SOP 05-1		-			-			-			-			-			(2.8	)		-
Deferrals		27.4			29.8			35.5			26.0			26.4			51.1			52.4
Amortization, net of interest:
Unlocking		0.9			0.6			(0.9	)		0.5			(0.2	)		2.4			0.3
Other amortization		(8.7	)		(9.1	)		(10.1	)		(6.2	)		(8.6	)		(15.9	)		(14.8	)
Deferrals, net of amortization included in insurance benefits or interest credited		19.6			21.3			24.5			20.3			17.6			37.6			37.9
Adjustment related to realized (gains) losses on available-for-sale securities and derivatives		(1.0	)		2.8			5.6			(1.9	)		(1.0	)		(3.6	)		(2.9	)
Balance at End-of-Period	$	225.0		$	249.1		$	279.2		$	297.6		$	314.2		$	225.0		$	314.2

(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 benefits by $3 million and reduced DAC amortization by $23 million.

(2)  See page 6 for detail.

(3)  See page 1 for detail.

(4)  Contains discontinued operations and the loss on disposition.  See Discontinued Operations on page 28 for additional details.

(5) The income used in the calculation of our diluted earnings per share is reduced by minority interest adjustments related to outstanding stock options under the Delaware Investments U.S., Inc stock option incentive plan. See page 5 for detail of minority interest.

6/30/2008													PAGE 8
Consolidating Statements of Income From Operations
Unaudited (in millions)
For the Quarter Ended June 30, 2008
	Individual Markets				Employer Markets
					Defined		Executive		Group		Investment		Lincoln		Other Opera-
	Life		Annuities		Contribution		Benefits		Protection		Management		UK		tions (1)			Consolidated
Operating Revenues
Insurance premiums	$	89.4	$	19.0	$	-	$	0.1	$	393.0	$	-	$	26.4	$	1.6		$	529.5
Surrender charges		14.5		9.6		1.5		-		-		-		-		-			25.6
Mortality assessments		320.5		-		-		7.6		-		-		9.1		-			337.2
Expense assessments		124.6		247.6		59.3		5.0		-		-		42.6		-			479.1
Investment advisory fees - external		-		-		-		-		-		75.8		-		-			75.8
Investment advisory fees - inter-segment		-		-		-		-		-		20.6		-		(20.6	)		-
Net investment income		466.8		245.3		174.8		52.5		30.5		-		19.8		87.1			1,076.8
Operating realized gain (loss) (2)		-		12.4		0.1		-		-		-		-		-			12.5
Amortization of deferred gain on business sold
through reinsurance		-		-		-		-		-		-		-		18.4			18.4
Other revenues and fees		4.9		84.8		3.7		0.2		1.4		27.9		-		23.5			146.4
Total Operating Revenues		1,020.7		618.7		239.4		65.4		424.9		124.3		97.9		110.0			2,701.3
Operating Expenses
Benefits		300.3		35.2		0.1		3.8		285.7		-		30.2		28.9			684.2
Interest credited to contract holder funds		262.1		163.0		107.0		38.6		0.3		-		-		41.8			612.8
Operating and acquisition expenses		202.0		260.5		72.4		5.4		80.3		75.3		40.0		62.1			798.0
Operating and acquisition expenses for investment
advisory fees - inter-segment		-		-		-		-		-		20.6		-		(20.6	)		-
Taxes, licenses and fees		25.6		7.7		3.0		1.0		9.0		4.9		-		1.1			52.3
Interest and debt expense		-		-		-		-		-		-		-		64.8			64.8
Total Operating Expenses		790.0		466.4		182.5		48.8		375.3		100.8		70.2		178.1			2,212.1
Income (loss) from operations before federal income taxes		230.7		152.3		56.9		16.6		49.6		23.5		27.7		(68.1	)		489.2
Federal income taxes		78.1		36.1		15.7		5.6		17.4		8.5		9.7		(23.7	)		147.4
Income from Operations	$	152.6	$	116.2	$	41.2	$	11.0	$	32.2	$	15.0	$	18.0	$	(44.4	)	$	341.8

(1) Includes consolidating adjustments.

(2)  For detail, see pages 14 and 18.

6/30/2008															PAGE 8(B)
Consolidating Statements of Income From Operations
Unaudited (in millions)
For the Quarter Ended June 30, 2007
	Individual Markets				Employer Markets
					Defined		Executive		Group		Investment		Lincoln		Other Opera-
	Life		Annuities		Contribution		Benefits		Protection		Management		UK		tions (1)			Consolidated
Operating Revenues
Insurance premiums	$	87.8	$	16.6	$	-	$	0.1	$	361.3	$	-	$	24.4		(1.2	)	$	489.0
Surrender charges		15.7		10.1		2.2		-		-		-		-		-			28.0
Mortality assessments		282.4		-		-		8.2		-		-		8.9		-			299.5
Expense assessments		69.9		233.9		63.0		4.7		-		-		39.9		-			411.4
Investment advisory fees - external		-		-		-		-		-		92.7		-		-			92.7
Investment advisory fees - inter-segment		-		-		-		-		-		19.6		-		(19.6	)		-
Net investment income		493.3		265.3		182.2		53.1		28.5		-		19.4		91.4			1,133.2
Operating realized gain (loss) (2)		-		1.3		-		-		-		-		-		-			1.3
Amortization of deferred gain on business sold																			-
through reinsurance		-		-		-		-		-		-		-		18.6			18.6
Other revenues and fees		8.3		96.5		4.6		-		1.2		38.7		-		34.4			183.7
Total Operating Revenues		957.4		623.7		252.0		66.1		391.0		151.0		92.6		123.6			2,657.4
Operating Expenses
Benefits		263.0		26.7		-		2.8		265.6		-		34.4		38.2			630.7
Interest credited to contract holder funds		254.0		165.1		104.6		38.1		-		-		-		44.5			606.3
Operating and acquisition expenses		144.4		261.3		76.2		7.8		71.2		109.5		40.2		53.7			764.3
Operating and acquisition expenses for investment
advisory fees - inter-segment		-		-		-		-		-		19.6		-		(19.6	)		-
Taxes, licenses and fees		26.6		5.7		4.4		1.0		9.5		4.0		-		0.5			51.7
Interest and debt expense		-		-		-		-		-		-		-		73.1			73.1
Total Operating Expenses		688.0		458.8		185.2		49.7		346.3		133.1		74.6		190.4			2,126.1
Income (loss) from operations before federal income taxes		269.4		164.9		66.8		16.4		44.7		17.9		18.0		(66.8	)		531.3
Federal income taxes		93.0		41.5		19.5		5.6		15.7		6.6		6.3		(30.6	)		157.6
Income from Operations	$	176.4	$	123.4	$	47.3	$	10.8	$	29.0	$	11.3	$	11.7	$	(36.2	)	$	373.7

(1) Includes consolidating adjustments.

(2)  For detail, see page 14.

6/30/2008													PAGE 9
Consolidating Statements of Income From Operations
Unaudited (in millions)
For the Six Months Ended June 30, 2008
	Individual Markets				Employer Markets
					Defined		Executive		Group		Investment		Lincoln		Other Opera-
	Life		Annuities		Contribution		Benefits		Protection		Management		UK		tions (1)			Consolidated
Operating Revenues
Insurance premiums	$	175.7	$	50.6	$	-	$	0.2	$	763.4	$	-	$	45.4	$	3.0		$	1,038.3
Surrender charges		30.3		19.2		3.4		-		-		-		-		-			52.9
Mortality assessments		633.1		-		-		16.7		-		-		18.2		-			668.0
Expense assessments		241.3		483.6		118.6		9.6		-		-		79.7					932.8
Investment advisory fees - external		-		-		-		-		-		152.0		-		-			152.0
Investment advisory fees - inter-segment		-		-		-		-		-		40.6		-		(40.6	)		-
Net investment income		914.2		493.1		346.5		104.4		58.2		-		40.1		185.7			2,142.2
Operating realized gain (loss) (2)		-		22.6		0.1		-		-		-		-		-			22.7
Amortization of deferred gain on business sold																			-
through reinsurance		-		-		-		-		-		-		-		36.9			36.9
Other revenues and fees		13.6		172.2		8.5		0.1		2.7		52.0		0.1		42.9			292.1
Total Operating Revenues		2,008.2		1,241.3		477.1		131.0		824.3		244.6		183.5		227.9			5,337.9
Operating Expenses
Benefits		596.3		86.6		0.1		6.3		554.8		-		60.9		56.9			1,361.9
Interest credited to contract holder funds		520.3		326.2		212.9		77.0		0.5		-		-		87.6			1,224.5
Operating and acquisition expenses		385.1		501.8		144.3		10.1		159.9		152.8		78.5		112.5			1,545.0
Operating and acquisition expenses for investment
advisory fees - inter-segment		-		-		-		-		-		40.6		-		(40.6	)		-
Taxes, licenses and fees		55.3		18.1		7.4		3.0		19.0		8.5		-		3.2			114.5
Interest and debt expense		-		-		-		-		-		-		-		140.2			140.2
Total Operating Expenses		1,557.0		932.7		364.7		96.4		734.2		201.9		139.4		359.8			4,386.1
Income (loss) from operations before federal income taxes		451.2		308.6		112.4		34.6		90.1		42.7		44.1		(131.9	)		951.8
Federal income taxes		153.1		74.6		30.8		11.7		31.6		15.6		15.5		(45.3	)		287.6
Income from Operations	$	298.1	$	234.0	$	81.6	$	22.9	$	58.5	$	27.1	$	28.6	$	(86.6	)	$	664.2
(1) Includes consolidating adjustments.
(2)  For detail, see pages 14 and 18.

6/30/2008														PAGE 9(B)
Consolidating Statements of Income From Operations
Unaudited (in millions)
For the Six Months Ended June 30, 2007
	Individual Markets				Employer Markets
					Defined		Executive			Group		Investment		Lincoln		Other Opera-
	Life		Annuities		Contribution		Benefits			Protection		Management		UK		tions (1)			Consolidated
Operating Revenues
Insurance premiums	$	175.6	$	29.4	$	-	$	0.2		$	692.7	$	-	$	48.5		1.5		$	947.9
Surrender charges		30.9		19.8		4.3		-			-		-		-		-			55.0
Mortality assessments		574.7		-		-		17.1			-		-		18.9		-			610.7
Expense assessments		181.8		444.8		122.7		9.3			-		-		77.1		-			835.7
Investment advisory fees - external		-		-		-		-			-		183.0		-		-			183.0
Investment advisory fees - inter-segment		-		-		-		-			-		44.1		-		(44.1	)		-
Net investment income		947.3		530.6		362.5		108.9			56.4		-		38.7		178.6			2,223.0
Operating realized gain (loss) (2)		-		2.6		-		-			-		-		-		-			2.6
Amortization of deferred gain on business sold
through reinsurance		-		-		-		-			-		-		-		37.2			37.2
Other revenues and fees		18.6		186.8		9.3		(0.1	)		2.3		74.0		0.1		59.1			350.1
Total Operating Revenues		1,928.9		1,214.0		498.8		135.4			751.4		301.1		183.3		232.3			5,245.2
Operating Expenses
Benefits		509.0		52.0		-		5.5			512.3		-		70.5		74.2			1,223.5
Interest credited to contract holder funds		505.7		326.3		209.0		76.3			-		-		-		88.1			1,205.4
Operating and acquisition expenses		332.8		502.4		142.7		16.8			139.7		205.5		78.1		89.8			1,507.8
Operating and acquisition expenses for investment
advisory fees - inter-segment		-		-		-		-			-		44.1		-		(44.1	)		-
Taxes, licenses and fees		59.5		14.6		9.5		2.2			19.2		8.1		-		3.9			117.0
Interest and debt expense		-		-		-		-			-		-		-		135.5			135.5
Total Operating Expenses		1,407.0		895.3		361.2		100.8			671.2		257.7		148.6		347.4			4,189.2
Income (loss) from operations before federal income taxes		521.9		318.7		137.6		34.6			80.2		43.4		34.7		(115.1	)		1,056.0
Federal income taxes		178.9		78.7		40.6		11.9			28.1		15.9		12.2		(51.0	)		315.3
Income from Operations	$	343.0	$	240.0	$	97.0	$	22.7		$	52.1	$	27.5	$	22.5	$	(64.1	)	$	740.7

(1) Includes consolidating adjustments.

(2)  For detail, see page 14.

6/30/2008													PAGE 10
Consolidated Balance Sheets
Unaudited (millions of dollars)
	As of
	June			Sept.			Dec.			March			June
	2007			2007			2007			2008			2008
ASSETS
Investments:
Corporate bonds	$	44,023.4		$	44,089.7		$	44,147.9		$	43,535.4		$	42,618.0
U.S. Government bonds		248.1			239.4			222.0			231.9			203.9
Foreign government bonds		975.0			1,030.0			1,037.5			1,037.4			907.5
Asset and mortgage-backed securities		9,946.2			10,479.7			10,604.6			10,568.8			10,547.7
State and municipal bonds		158.7			152.1			153.1			153.0			141.7
Preferred stocks - redeemable		95.5			95.3			110.7			97.5			98.8
Common stocks		488.0			499.2			413.8			384.2			330.7
Preferred stocks - equity		198.9			171.0			104.1			90.2			133.9
Total available-for-sale securities		56,133.8			56,756.4			56,793.7			56,098.4			54,982.2
Trading securities		2,818.3			2,716.6			2,730.2			2,713.6			2,550.5
Mortgage loans		7,310.8			7,280.7			7,422.7			7,531.9			7,677.9
Real estate		387.6			385.0			258.3			175.3			135.7
Policy loans		2,787.0			2,790.2			2,834.7			2,804.0			2,801.8
Other long-term investments		1,395.0			1,584.0			1,882.0			2,232.1			2,053.3
Total investments		70,832.5			71,512.9			71,921.6			71,555.3			70,201.4
Cash and invested cash		989.1			1,327.5			1,665.5			2,446.8			1,921.4
DAC and VOBA		9,100.6			9,337.0			9,579.8			9,995.5			10,608.1
Premiums and fees receivable		432.3			401.2			400.6			468.1			399.3
Accrued investment income		861.0			916.5			843.3			917.3			875.9
Reinsurance recoverables		8,179.1			8,226.7			8,237.4			8,407.2			8,219.6
Goodwill		4,159.0			4,159.3			4,143.7			4,128.4			4,045.0
Other assets		3,599.3			3,432.6			3,529.9			2,727.6			2,715.1
Separate account assets		89,497.2			92,903.1			91,113.3			84,703.1			85,295.4
Total assets	$	187,650.1		$	192,216.8		$	191,435.1		$	185,349.3		$	184,281.2
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Future contract benefits	$	15,041.8		$	15,317.2		$	16,006.3		$	16,501.0		$	16,218.1
Other contract holder funds		59,408.2			59,572.7			59,640.6			60,175.8			60,362.5
Short-term debt		231.0			327.1			550.2			410.6			900.0
Long-term debt		4,107.8			4,408.0			4,618.3			4,627.0			4,101.8
Reinsurance related derivative liability		157.5			191.5			219.5			205.2			112.5
Funds withheld reinsurance liabilities		2,154.9			2,136.6			2,117.4			2,117.0			2,068.7
Deferred gain on indemnity reinsurance		734.3			715.1			695.8			676.6			657.6
Payables for collateral under securities loaned and derivatives		1,372.8			1,320.3			1,135.1			1,796.2			1,491.1
Other liabilities		3,108.9			3,362.3			3,620.2			3,050.5			2,575.8
Separate account liabilities		89,497.2			92,903.1			91,113.3			84,703.1			85,295.4
Total liabilities		175,814.4			180,253.9			179,716.7			174,263.0			173,783.5
Stockholders' Equity
Preferred stock		0.5			0.5			0.4			0.4			0.4
Common stock		7,362.1			7,308.6			7,200.5			7,074.8			7,023.1
Retained earnings		4,323.8			4,456.9			4,292.2			4,332.8			4,282.5
Accumulated other comprehensive income (loss):
Net unrealized gain (loss) on available-for-sale securities		16.6			56.0			86.0			(452.1	)		(939.4	)
Net unrealized gain on derivative instruments		35.5			31.9			52.2			43.9			41.4
Foreign currency translation adjustment		181.4			193.6			175.6			174.4			177.2
Funded status of employee benefit plans		(84.2	)		(84.6	)		(88.5	)		(87.9	)		(87.5	)
Total accumulated other comprehensive income (loss)		149.3			196.9			225.3			(321.7	)		(808.3	)
Total stockholders' equity		11,835.7			11,962.9			11,718.4			11,086.3			10,497.7
Total Liabilities and Stockholders' Equity	$	187,650.1		$	192,216.8		$	191,435.1		$	185,349.3		$	184,281.2
Share Data
Stockholders' equity per share	$	43.58		$	44.41		$	44.32		$	42.74		$	40.85
Book value, excluding AOCI	$	43.03		$	43.67		$	43.47		$	43.98		$	43.99
Common shares outstanding - assuming conversion of
preferred shares (in millions)		271.6			269.4			264.4			259.4			257.0

6/30/2008																		PAGE 11
Balance Sheet Data - Segment Highlights
Unaudited (in millions)
	Individual Markets				Employer Markets
As of June 30, 2008	Life		Annuities		Defined Contribution		Executive Benefits		Group Protection		Investment Management		Lincoln UK		Other Opera- tions (1)			Consolidated
Assets
Allocated investments and cash and invested cash (2)	$	29,629.1	$	17,809.0	$	11,354.2	$	3,458.5	$	2,002.3	$	155.4	$	1,347.0	$	6,367.3		$	72,122.8
DAC and VOBA		5,913.4		2,855.5		629.7		321.6		133.2		-		749.9		4.8			10,608.1
Goodwill		2,192.3		1,039.8		20.2		-		274.3		247.6		16.5		254.3			4,045.0
DSI and other intangibles		91.0		312.1		5.0		-		-		5.0		-		296.3			709.4
Amounts recoverable from reinsurers		1,924.8		689.7		-		5.0		31.0		-		72.8		5,496.3			8,219.6
Separate account assets		4,174.4		55,734.9		16,181.1		1,130.0		-		-		7,832.7		242.3			85,295.4
Liabilities and Capital
Future contract benefits		5,869.0		976.9		1.5		377.4		1,324.4		-		1,135.9		6,533.0			16,218.1
Other contract holder funds		26,234.8		17,425.9		11,286.9		3,039.4		130.7		-		388.8		1,856.0			60,362.5
Allocated capital (3)		7,734.3		3,467.8		953.2		361.1		987.2		359.0		379.6		(2,936.2	)		11,306.0
As of December 31, 2007
Assets
Allocated investments and cash and invested cash	$	29,473.9	$	18,080.5	$	11,460.9	$	3,498.2	$	1,934.2	$	167.7	$	1,396.1	$	7,575.6		$	73,587.1
DAC and VOBA		5,408.7		2,477.0		513.8		283.0		123.4		-		772.1		1.8			9,579.8
Goodwill		2,201.0		1,045.6		20.2		-		274.3		247.0		16.5		339.1			4,143.7
DSI and other intangibles		93.0		278.8		3.4		-		-		5.4		-		385.7			766.3
Amounts recoverable from reinsurers		1,943.6		744.4		-		4.9		31.3		-		69.8		5,443.4			8,237.4
Separate accounts assets		4,615.5		58,508.4		17,845.2		1,032.7		-		-		8,850.4		261.1			91,113.3
Liabilities and Capital
Future contract benefits		5,898.7		816.9		-		356.2		1,273.0		-		1,146.9		6,514.6			16,006.3
Other contract holder funds		25,388.1		17,749.7		10,891.7		3,039.7		17.2		-		402.9		2,151.3			59,640.6
Allocated capital (3)		7,835.8		3,552.7		898.7		353.9		968.3		348.5		361.8		(2,826.6	)		11,493.1

(1) Includes consolidating adjustments.

(2) Includes inter-segment cash management balances our segments utilize to borrow money to meet their short-term needs and also to invest short-term funds with other segments.  These balances eliminate in consolidation.

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

6/30/2008	PAGE 12
Individual Markets - Life Insurance
Income Statements and Operational Data
Unaudited (millions of dollars)

	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Operating Revenues
Insurance premiums	$	87.8		$	84.7		$	90.0		$	86.3		$	89.4			1.8	%	$	175.6		$	175.7			0.1	%
Surrender charges		15.7			14.0			14.1			15.8			14.5			-7.6	%		30.9			30.3			-1.9	%
Mortality assessments (1)		282.4			303.3			310.3			312.6			320.5			13.5	%		574.7			633.1			10.2	%
Expense assessments (1)		69.9			139.8			112.9			116.7			124.6			78.3	%		181.8			241.3			32.7	%
Net investment income		493.3			444.5			464.1			447.4			466.8			-5.4	%		947.3			914.2			-3.5	%
Other revenues and fees		8.3			5.9			10.7			8.7			4.9			-41.0	%		18.6			13.6			-26.9	%
Total Operating Revenues		957.4			992.2			1,002.1			987.5			1,020.7			6.6	%		1,928.9			2,008.2			4.1	%
Operating Expenses
Benefits (1)		263.0			260.5			302.6			296.0			300.3			14.2	%		509.0			596.3			17.2	%
Interest credited to contract holder funds		254.0			255.1			260.2			258.2			262.1			3.2	%		505.7			520.3			2.9	%
Operating and acquisition expenses		171.0			219.0			199.0			212.8			227.6			33.1	%		392.3			440.4			12.3	%
Total Operating Expenses		688.0			734.6			761.8			767.0			790.0			14.8	%		1,407.0			1,557.0			10.7	%
Income from operations before federal income taxes		269.4			257.6			240.3			220.5			230.7			-14.4	%		521.9			451.2			-13.5	%
Federal income taxes		93.0			84.0			81.5			75.0			78.1			-16.0	%		178.9			153.1			-14.4	%
Income From Operations	$	176.4		$	173.6		$	158.8		$	145.5		$	152.6			-13.5	%	$	343.0		$	298.1			-13.1	%
Effective Tax Rate		34.5	%		32.6	%		33.9	%		34.0	%		33.9	%					34.3	%		33.9	%
Average Equity	$	7,789.2		$	7,911.1		$	7,925.1		$	7,784.3		$	7,733.6					$	7,679.9		$	7,758.9
Return on Average Equity		9.1	%		8.8	%		8.0	%		7.5	%		7.9	%					8.9	%		7.7	%
Operating and Acquisition Expenses
Commissions	$	211.6		$	213.2		$	211.9		$	182.7		$	174.1			-17.7	%	$	438.8		$	356.8			-18.7	%
General and administrative expenses		114.6			103.6			108.3			102.7			98.2			-14.3	%		224.6			200.9			-10.6	%
Taxes, licenses and fees		26.6			27.3			23.5			29.7			25.6			-3.8	%		59.5			55.3			-7.1	%
Amortization of sales force intangibles		1.0			1.0			1.0			1.0			1.0			0.0	%		2.0			2.0			0.0	%
Total commissions and expenses incurred		353.8			345.1			344.7			316.1			298.9			-15.5	%		724.9			615.0			-15.2	%
Less: commissions and expenses capitalized		(272.4	)		(270.5	)		(268.2	)		(234.1	)		(231.1	)		15.2	%		(561.3	)		(465.3	)		17.1	%
Amortization of DAC and VOBA, net of interest (1)		89.6			144.4			122.5			130.8			159.8			78.3	%		228.7			290.7			27.1	%
Net Operating and Acquisition Expenses	$	171.0		$	219.0		$	199.0		$	212.8		$	227.6			33.1	%	$	392.3		$	440.4			12.3	%
General and Administrative Expenses - Basis Points on Average Account Values - Annualized		169			150			155			147			140			(28	)		167			144			(23	)
Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	4,795.8		$	5,126.4		$	5,259.6		$	5,408.7		$	5,670.0					$	4,659.4		$	5,408.7
Deferrals		272.4			270.5			268.2			234.1			231.1						561.3			465.3
Amortization, net of interest: (1)
Unlocking		20.8			(3.8	)		6.1			(10.2	)		(18.1	)					32.1			(28.3	)
Other amortization		(110.4	)		(140.6	)		(128.6	)		(120.6	)		(141.7	)					(260.8	)		(262.4	)
Deferrals, net of amortization included inoperating and acquisition expenses		182.8			126.1			145.7			103.3			71.3						332.6			174.6
Adjustment related to realized (gains) losses on available-for-sale securities and derivatives		(2.4	)		0.6			56.1			7.0			9.6						(14.9	)		16.6
Adjustment related to unrealized (gains) losses on available-for-sale securities and derivatives		150.2			6.5			(52.7	)		151.0			162.5						149.3			313.5
Balance at End-of-Period	$	5,126.4		$	5,259.6		$	5,408.7		$	5,670.0		$	5,913.4					$	5,126.4		$	5,913.4
Roll Forward of DFEL
Balance at beginning-of-period	$	490.6		$	569.0		$	585.2		$	648.7		$	696.7					$	449.5		$	648.7
Deferrals		112.4			83.9			98.2			87.5			89.5						177.9			177.0
Amortization, net of interest:
Unlocking		7.1			(27.0	)		0.7			(3.5	)		(11.0	)					9.6			(14.5	)
Other amortization		(41.1	)		(40.7	)		(35.4	)		(36.0	)		(37.7	)					(68.0	)		(73.7	)
Deferrals, net of amortization included in expense assessments		78.4			16.2			63.5			48.0			40.8						119.5			88.8
Balance at End-of-Period	$	569.0		$	585.2		$	648.7		$	696.7		$	737.5					$	569.0		$	737.5
(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 benefits by $3 million and reduced DAC amortization by $23 million.

6/30/2008																									PAGE 13
Individual Markets - Life Insurance
Operational Data and Account Value Roll Forward
Unaudited (billions of dollars)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Sales by Product (1) (in millions)
UL
Excluding MoneyGuard®	$	144.9		$	143.8		$	141.2		$	113.7		$	123.7			-14.6	%	$	311.1		$	237.4			-23.7	%
MoneyGuard®		9.9			10.9			12.1			11.0			12.4			25.3	%		17.3			23.4			35.3	%
Total		154.8			154.7			153.3			124.7			136.1			-12.1	%		328.4			260.8			-20.6	%
Variable Universal Life		17.3			17.7			21.9			15.6			11.4			-34.1	%		37.8			27.0			-28.6	%
Term/Whole Life		7.9			7.5			6.9			5.1			5.4			-31.6	%		17.3			10.5			-39.3	%
Total	$	180.0		$	179.9		$	182.1		$	145.4		$	152.9			-15.1	%	$	383.5		$	298.3			-22.2	%
First-Year Paid Premiums (in millions)
UL
Excluding MoneyGuard®	$	315.7		$	303.8		$	304.6		$	245.4		$	254.3			-19.4	%	$	683.6		$	499.7			-26.9	%
MoneyGuard®		65.9			72.4			80.4			73.6			82.5			25.2	%		115.0			156.1			35.7	%
Total		381.6			376.2			385.0			319.0			336.8			-11.7	%		798.6			655.8			-17.9	%
Variable Universal Life		47.8			46.4			48.9			37.0			28.8			-39.7	%		100.2			65.8			-34.3	%
Term/Whole Life		18.3			19.1			24.4			14.0			16.2			-11.5	%		35.7			30.2			-15.4	%
Total	$	447.7		$	441.7		$	458.3		$	370.0		$	381.8			-14.7	%	$	934.5		$	751.8			-19.6	%
Life Insurance In Force
UL and other	$	276.040		$	279.933		$	284.305		$	286.187		$	288.668			4.6	%	$	276.040		$	288.668			4.6	%
Term insurance		236.155			236.414			235.919			234.860			234.109			-0.9	%		236.155			234.109			-0.9	%
Total	$	512.195		$	516.347		$	520.224		$	521.047		$	522.777			2.1	%	$	512.195		$	522.777			2.1	%
Interest-Sensitive Life
Balance at beginning-of-period	$	22.228		$	22.517		$	22.818		$	23.161		$	23.355			5.1	%	$	21.890		$	23.161			5.8	%
Deposits		0.863			0.843			0.934			0.824			0.830			-3.8	%		1.745			1.654			-5.2	%
Withdrawals and deaths		(0.311	)		(0.258	)		(0.262	)		(0.314	)		(0.236	)		24.1	%		(0.575	)		(0.550	)		4.3	%
Net flows		0.552			0.585			0.672			0.510			0.594			7.6	%		1.170			1.104			-5.6	%
Contract holder assessments (2)		(0.506	)		(0.527	)		(0.575	)		(0.561	)		(0.594	)		-17.4	%		(1.029	)		(1.155	)		-12.2	%
Interest credited		0.243			0.243			0.246			0.245			0.249			2.5	%		0.486			0.494			1.6	%
Balance at End-of-Period (3)	$	22.517		$	22.818		$	23.161		$	23.355		$	23.604			4.8	%	$	22.517		$	23.604			4.8	%
Variable Universal Life
Balance at beginning-of-period	$	4.696		$	4.948		$	5.057		$	4.961		$	4.526			-3.6	%	$	4.600		$	4.961			7.8	%
Deposits		0.142			0.137			0.152			0.143			0.122			-14.1	%		0.299			0.265			-11.4	%
Withdrawals and deaths		(0.109	)		(0.087	)		(0.079	)		(0.073	)		(0.089	)		18.3	%		(0.186	)		(0.162	)		12.9	%
Net flows		0.033			0.050			0.073			0.070			0.033			0.0	%		0.113			0.103			-8.8	%
Contract holder assessments		(0.080	)		(0.080	)		(0.082	)		(0.082	)		(0.081	)		-1.3	%		(0.159	)		(0.163	)		-2.5	%
Investment income and change in market value		0.299			0.139			(0.087	)		(0.423	)		(0.005	)	NM				0.394			(0.428	)	NM
Balance at End-of-Period	$	4.948		$	5.057		$	4.961		$	4.526		$	4.473			-9.6	%	$	4.948		$	4.473			-9.6	%
Total Life Insurance
Balance at beginning-of-period	$	26.924		$	27.465		$	27.875		$	28.122		$	27.881			3.6	%	$	26.490		$	28.122			6.2	%
Deposits		1.005			0.980			1.086			0.967			0.952			-5.3	%		2.044			1.919			-6.1	%
Withdrawals and deaths		(0.420	)		(0.345	)		(0.341	)		(0.387	)		(0.325	)		22.6	%		(0.761	)		(0.712	)		6.4	%
Net flows		0.585			0.635			0.745			0.580			0.627			7.2	%		1.283			1.207			-5.9	%
Contract holder assessments (2)		(0.586	)		(0.607	)		(0.657	)		(0.643	)		(0.675	)		-15.2	%		(1.188	)		(1.318	)		-10.9	%
Investment income and change in market value		0.542			0.382			0.159			(0.178	)		0.244			-55.0	%		0.880			0.066			-92.5	%
Balance at End-of-Period	$	27.465		$	27.875		$	28.122		$	27.881		$	28.077			2.2	%	$	27.465		$	28.077			2.2	%
Interest Rate Yields and Spread
																Change									Change
Interest-Sensitive Products (4)																(Basis Points)									(Basis Points)
Fixed maturity securities, mortgage loans on real
estate and other, net of investment expenses		6.09	%		6.02	%		6.05	%		6.00	%		5.88	%		(21	)		6.13	%		5.95	%		(18	)
Commercial mortgage loan prepayment and bond makewhole premiums		0.14	%		0.08	%		0.15	%		0.03	%		0.15	%		1			0.17	%		0.09	%		(8	)
Alternative investments		0.75	%		-0.01	%		0.10	%		0.01	%		0.24	%		(51	)		0.44	%		0.12	%		(32	)
Net investment income yield on reserves		6.98	%		6.09	%		6.30	%		6.04	%		6.27	%		(71	)		6.74	%		6.16	%		(58	)
Interest rate credited to contract holders		4.45	%		4.41	%		4.41	%		4.34	%		4.33	%		(12	)		4.46	%		4.33	%		(13	)
Interest rate spread		2.53	%		1.68	%		1.89	%		1.70	%		1.94	%		(59	)		2.28	%		1.83	%		(45	)
Traditional Products (5)
Fixed maturity securities, mortgage loans on real
estate and other, net of investment expenses		6.29	%		6.15	%		6.21	%		6.12	%		6.23	%		(6	)		6.33	%		6.17	%		(16	)
Commercial mortgage loan prepayment and bond makewhole premiums		0.14	%		0.09	%		0.02	%		0.11	%		0.00	%		(14	)		0.08	%		0.06	%		(2	)
Alternative investments		0.05	%		-0.06	%		0.00	%		-0.02	%		-0.02	%		(7	)		0.04	%		-0.02	%		(6	)
Net investment income yield on reserves		6.48	%		6.18	%		6.23	%		6.21	%		6.21	%		(27	)		6.45	%		6.21	%		(24	)

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

(2) Interest-sensitive contract holder assessments in the second quarter of 2007 includes +.017 related to certain adjustments.

(3)  Includes UL, interest-sensitive whole life and the fixed investment option of variable universal life products.

(4)  For the interest-sensitive 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 and reverse repurchase agreement interest expense from our yield and spread calculations.  The average crediting rate is calculated using interest credited on life products divided by average fixed account values.

(5) For the traditional life products, the yield on earning assets is calculated as net investment income on traditional investment portfolios divided by average earning assets.  As of June 30, 2008, interest-sensitive products represented approximately 82% of total interest-sensitive and traditional earning assets.

6/30/2008																									PAGE 14
Individual Markets - Annuities
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Operating Revenues
Insurance premiums	$	16.6		$	42.6		$	46.5		$	31.6		$	19.0			14.5	%	$	29.4		$	50.6			72.1	%
Surrender charges		10.1			9.8			9.1			9.6			9.6			-5.0	%		19.8			19.2			-3.0	%
Expense assessments		233.9			249.4			265.2			236.0			247.6			5.9	%		444.8			483.6			8.7	%
Net investment income		265.3			249.4			251.8			247.8			245.3			-7.5	%		530.6			493.1			-7.1	%
Operating realized gain (1)		1.3			0.9			2.2			10.2			12.4		NM				2.6			22.6		NM
Other revenues and fees (2)		96.5			94.9			97.5			87.4			84.8			-12.1	%		186.8			172.2			-7.8	%
Total Operating Revenues		623.7			647.0			672.3			622.6			618.7			-0.8	%		1,214.0			1,241.3			2.2	%
Operating Expenses
Benefits		26.7			56.3			62.0			51.4			35.2			31.8	%		52.0			86.6			66.5	%
Interest credited to contract holder funds		165.1			165.3			167.9			163.2			163.0			-1.3	%		326.3			326.2			0.0	%
Operating and acquisition expenses		267.0			255.4			287.3			251.7			268.2			0.4	%		517.0			519.9			0.6	%
Total Operating Expenses		458.8			477.0			517.2			466.3			466.4			1.7	%		895.3			932.7			4.2	%
Income from operations before federal income taxes		164.9			170.0			155.1			156.3			152.3			-7.6	%		318.7			308.6			-3.2	%
Federal income taxes		41.5			44.1			36.2			38.5			36.1			-13.0	%		78.7			74.6			-5.2	%
Income From Operations	$	123.4		$	125.9		$	118.9		$	117.8		$	116.2			-5.8	%	$	240.0		$	234.0			-2.5	%
Effective Tax Rate		25.2	%		25.9	%		23.3	%		24.6	%		23.7	%					24.7	%		24.2	%
Average Equity	$	3,491.1		$	3,537.8		$	3,549.1		$	3,561.6		$	3,519.2					$	3,468.9		$	3,540.4
Return on Average Equity		14.1	%		14.2	%		13.4	%		13.2	%		13.2	%					13.8	%		13.2	%
Income from Operations - Basis Points on Average Account Values - Annualized		69			68			62			64			62			(8	)		69			63			(6	)
Operating Realized Gain (1)
Indexed annuity net derivatives results (3)	$	1.2		$	0.2		$	(0.1	)	$	(1.4	)	$	(0.6	)	NM			$	2.1		$	(2.0	)	NM
Guaranteed living benefits risk and profit charges (4)		1.4			1.6			1.8			5.8			10.3		NM				2.2			16.1		NM
Guaranteed death benefits hedging offset (5)		(1.3	)		(0.9	)		0.5			5.8			2.7		NM				(1.7	)		8.5		NM
Total Operating Realized Gain	$	1.3		$	0.9		$	2.2		$	10.2		$	12.4		NM			$	2.6		$	22.6		NM
Operating and Acquisition Expenses
Commissions	$	178.9		$	189.0		$	212.3		$	165.6		$	186.4			4.2	%	$	330.9		$	352.0			6.4	%
General and administrative expenses		82.2			80.9			96.7			80.2			79.9			-2.8	%		151.4			160.1			5.7	%
Broker-dealer commissions and general and administrative expenses		92.8			91.8			100.5			89.2			85.1			-8.3	%		180.0			174.3			-3.2	%
Taxes, licenses and fees		5.7			6.0			6.1			10.4			7.7			35.1	%		14.6			18.1			24.0	%
Total commissions and expenses incurred		359.6			367.7			415.6			345.4			359.1			-0.1	%		676.9			704.5			4.1	%
Less: commissions and expenses capitalized		(189.4	)		(196.2	)		(230.6	)		(172.8	)		(191.7	)		-1.2	%		(346.9	)		(364.5	)		-5.1	%
Amortization of DAC and VOBA, net of interest		96.8			83.9			102.3			79.1			100.8			4.1	%		187.0			179.9			-3.8	%
Net Operating and Acquisition Expenses	$	267.0		$	255.4		$	287.3		$	251.7		$	268.2			0.4	%	$	517.0		$	519.9			0.6	%
General and Administrative Expenses - Basis Points on Average Account Values - Annualized (6)		46			44			51			44			42			(4	)		44			43			(1	)

(1)  Included in income from operations.

(2) Primarily broker-dealer revenues.

(3) Changes in the fair value of the S&P 500 Index® call options that we hold and the change in the fair value of the embedded derivative liabilities of our indexed annuities products excluding the indexed annuity forward-starting option.

(4) The portion of the rider fee revenue for GLB calculated as the attributed fee in excess of net valuation premium.  See page 17 for additional details.

(5) Change in the fair value of the derivatives that offsets the benefit ratio unlocking of our SOP 03-1 reserves on our GMDB riders, including our expected cost of the hedging instruments.

(6) Includes distribution costs.

6/30/2008																			PAGE 15
Individual Markets - Annuities
Roll Forwards of DAC, VOBA, DFEL and DSI
Unaudited (millions of dollars)
	For the Three Months Ended															For the Six Months Ended
	June			Sept.			Dec.			March			June			June			June
Roll Forward of DAC and VOBA	2007			2007			2007			2008			2008			2007			2008
Balance at beginning-of-period	$	2,082.0		$	2,236.8		$	2,347.4		$	2,477.0		$	2,570.8		$	2,050.4		$	2,477.0
Cumulative effect of adoption of SOP 05-1		-			-			-			-			-			(27.2	)		-
Inter-segment transfer		-			-			-			(6.9	)		-			-			(6.9	)
Deferrals		189.4			196.2			230.6			172.8			191.7			346.9			364.5
Amortization, net of interest:
Unlocking		8.8			19.0			10.7			(0.6	)		0.4			14.5			(0.2	)
Other amortization		(105.6	)		(102.9	)		(113.0	)		(78.5	)		(101.2	)		(201.5	)		(179.7	)
Deferrals, net of amortization included in operating and acquisition expenses		92.6			112.3			128.3			93.7			90.9			159.9			184.6
Adjustment related to realized (gains) losses
on available-for-sale securities and derivatives		(10.2	)		21.1			34.8			(10.5	)		(7.3	)		(18.7	)		(17.8	)
Adjustment related to unrealized (gains) losses
on available-for-sale securities and derivatives		72.4			(22.8	)		(33.5	)		17.5			201.1			58.4			218.6
Business acquired		-			-			-			-			-			14.0			-
Balance at End-of-Period	$	2,236.8		$	2,347.4		$	2,477.0		$	2,570.8		$	2,855.5		$	2,236.8		$	2,855.5
Roll Forward of DFEL
Balance at beginning-of-period	$	104.6		$	111.9		$	122.0		$	130.9		$	141.6		$	100.9		$	130.9
Cumulative effect of adoption of SOP 05-1		-			-			-			-			-			(2.0	)		-
Deferrals		11.8			11.5			11.9			11.9			13.4			21.6			25.3
Amortization, net of interest:
Unlocking		0.2			1.4			(0.4	)		0.7			(0.5	)		0.7			0.2
Other amortization		(4.5	)		(4.0	)		(4.6	)		(2.7	)		(3.0	)		(7.9	)		(5.7	)
Deferrals, net of amortization included in
expense assessments		7.5			8.9			6.9			9.9			9.9			14.4			19.8
Adjustment related to realized gains (losses)
on available-for-sale securities and derivatives		(0.2	)		1.2			2.0			0.8			(0.5	)		(1.4	)		0.3
Balance at End-of-Period	$	111.9		$	122.0		$	130.9		$	141.6		$	151.0		$	111.9		$	151.0
Roll Forward of DSI
Balance at beginning-of-period	$	206.2		$	224.7		$	248.7		$	278.8		$	295.7		$	193.7		$	278.8
Cumulative effect of adoption of SOP 05-1		-			-			-			-			-			(2.8	)		-
Inter-segment transfer		-			-			-			(1.3	)		-			-			(1.3	)
Deferrals		27.3			29.7			35.5			25.7			26.1			50.9			51.8
Amortization, net of interest:
Unlocking		0.9			0.6			(0.9	)		0.5			(0.2	)		2.4			0.3
Other amortization		(8.7	)		(9.1	)		(10.1	)		(6.1	)		(8.5	)		(15.9	)		(14.6	)
Deferrals, net of amortization included in
interest credited		19.5			21.2			24.5			20.1			17.4			37.4			37.5
Adjustment related to realized (gains) losses
on available-for-sale securities		(1.0	)		2.8			5.6			(1.9	)		(1.0	)		(3.6	)		(2.9	)
Balance at End-of-Period	$	224.7		$	248.7		$	278.8		$	295.7		$	312.1		$	224.7		$	312.1

																						PAGE 16
Individual Markets - Annuities
Account Value Roll Forward
Unaudited (in billions)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Fixed Annuities
Balance at beginning-of-period	$	18.139		$	17.867		$	17.813		$	17.822		$	17.701			-2.4	%	$	18.545		$	17.822			-3.9	%
Business acquired		-			-			-			-			-		NM				0.040			-			-100.0	%
Gross deposits		0.982			1.231			1.288			1.160			1.371			39.6	%		1.803			2.531			40.4	%
Withdrawals and deaths		(0.893	)		(0.891	)		(0.706	)		(0.586	)		(0.618	)		30.8	%		(1.780	)		(1.204	)		32.4	%
Net flows		0.089			0.340			0.582			0.574			0.753		NM				0.023			1.327		NM
Transfer from (to) variable annuities		(0.560	)		(0.589	)		(0.734	)		(0.680	)		(0.797	)		-42.3	%		(1.117	)		(1.477	)		-32.2	%
Inter-segment transfer		-			-			-			(0.089	)		-		NM				-			(0.089	)	NM
Interest credited		0.172			0.165			0.126			0.048			0.116			-32.6	%		0.325			0.164			-49.5	%
Sales inducements deferred		0.027			0.030			0.035			0.026			0.026			-3.7	%		0.051			0.052			2.0	%
Balance at End-of-Period (Gross)		17.867			17.813			17.822			17.701			17.799			-0.4	%		17.867			17.799			-0.4	%
Reinsurance ceded		(1.598	)		(1.430	)		(1.352	)		(1.306	)		(1.255	)		21.5	%		(1.598	)		(1.255	)		21.5	%
Balance at End-of-Period (Net of Ceded) (1)	$	16.269		$	16.383		$	16.470		$	16.395		$	16.544			1.7	%	$	16.269		$	16.544			1.7	%
Variable Annuities
Balance at beginning-of-period	$	50.300		$	55.171		$	58.293		$	58.643		$	54.966			9.3	%	$	48.169		$	58.643			21.7	%
Gross deposits		2.295			2.247			2.594			1.866			2.065			-10.0	%		4.295			3.931			-8.5	%
Withdrawals and deaths		(1.247	)		(1.296	)		(1.367	)		(1.259	)		(1.229	)		1.4	%		(2.426	)		(2.488	)		-2.6	%
Net flows		1.048			0.951			1.227			0.607			0.836			-20.2	%		1.869			1.443			-22.8	%
Transfer from (to) fixed annuities		0.560			0.589			0.734			0.680			0.796			42.1	%		1.117			1.476			32.1	%
Inter-segment transfer		-			-			-			(0.206	)		-		NM				-			(0.206	)	NM
Investment increase and change in market value		3.263			1.582			(1.611	)		(4.758	)		(0.744	)	NM				4.016			(5.502	)	NM
Balance at End-of-Period (2)	$	55.171		$	58.293		$	58.643		$	54.966		$	55.854			1.2	%	$	55.171		$	55.854			1.2	%
Total Annuities
Balance at beginning-of-period	$	68.439		$	73.038		$	76.106		$	76.465		$	72.667			6.2	%	$	66.714		$	76.465			14.6	%
Business acquired		-			-			-			-			-		NM				0.040			-			-100.0	%
Gross deposits		3.277			3.478			3.882			3.026			3.436			4.9	%		6.098			6.462			6.0	%
Withdrawals and deaths		(2.140	)		(2.187	)		(2.073	)		(1.845	)		(1.847	)		13.7	%		(4.206	)		(3.692	)		12.2	%
Net flows		1.137			1.291			1.809			1.181			1.589			39.8	%		1.892			2.770			46.4	%
Transfers between fixed and variable accounts		-			-			-			-			(0.001	)	NM				-			(0.001	)	NM
Inter-segment transfer		-			-			-			(0.295	)		-		NM				-			(0.295	)	NM
Interest credited and change in market value		3.435			1.747			(1.485	)		(4.710	)		(0.628	)	NM				4.341			(5.338	)	NM
Sales inducements deferred		0.027			0.030			0.035			0.026			0.026			-3.7	%		0.051			0.052			2.0	%
Balance at End-of-Period (Gross)		73.038			76.106			76.465			72.667			73.653			0.8	%		73.038			73.653			0.8	%
Reinsurance ceded		(1.598	)		(1.430	)		(1.352	)		(1.306	)		(1.255	)		21.5	%		(1.598	)		(1.255	)		21.5	%
Balance at End-of-Period (Net of Ceded)	$	71.440		$	74.676		$	75.113		$	71.361		$	72.398			1.3	%	$	71.440		$	72.398			1.3	%
Variable Annuities Under Agreement - Included Above	$	0.164		$	0.161		$	0.149		$	0.128		$	0.120			-26.8	%	$	0.164		$	0.120			-26.8	%
Incremental Deposits: (3)
Fixed annuities	$	0.976		$	1.224		$	1.282		$	1.156		$	1.365			39.9	%	$	1.791		$	2.521			40.8	%
Variable annuities		2.265			2.217			2.558			1.838			2.043			-9.8	%		4.244			3.881			-8.6	%
Total Incremental Deposits	$	3.241		$	3.441		$	3.840		$	2.994		$	3.408			5.2	%	$	6.035		$	6.402			6.1	%

(1) Includes the fixed portion of variable annuities.

(2) Excludes the fixed portion of variable annuities.

(3) Represents gross deposits reduced by transfers from other Lincoln products.

6/30/2008																									PAGE 17
Individual Markets - Annuities
Account Values, Spread Information, GLB Expense Assessments,
GLB Attributed Fee and GLB Account Values by Type
Unaudited (billions of dollars)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Fixed Annuities - Excluding Fixed Portion of Variable Contracts
Deposits	$	0.129		$	0.286		$	0.231		$	0.086		$	0.137			6.2	%	$	0.255		$	0.223			-12.5	%
Withdrawals and deaths		(0.677	)		(0.651	)		(0.486	)		(0.378	)		(0.406	)		40.0	%		(1.351	)		(0.784	)		42.0	%
Net flows	$	(0.548	)	$	(0.365	)	$	(0.255	)	$	(0.292	)	$	(0.269	)		50.9	%	$	(1.096	)	$	(0.561	)		48.8	%
Gross fixed contract account values	$	10.377		$	10.115		$	9.960		$	9.767		$	9.595			-7.5	%	$	10.377		$	9.595			-7.5	%
Reinsurance ceded		(1.598	)		(1.430	)		(1.352	)		(1.306	)		(1.255	)		21.5	%		(1.598	)		(1.255	)		21.5	%
Net fixed contract account values	$	8.779		$	8.685		$	8.608		$	8.461		$	8.340			-5.0	%	$	8.779		$	8.340			-5.0	%
		-			-			-			-			-						-			-
Indexed Annuities
Deposits	$	0.191		$	0.199		$	0.204		$	0.218		$	0.356			86.4	%	$	0.352		$	0.574			63.1	%
Withdrawals and deaths		(0.061	)		(0.059	)		(0.062	)		(0.083	)		(0.102	)		-67.2	%		(0.123	)		(0.185	)		-50.4	%
Net flows	$	0.130		$	0.140		$	0.142		$	0.135		$	0.254			95.4	%	$	0.229		$	0.389			69.9	%
Indexed Annuity Account Values	$	4.033		$	4.228		$	4.392		$	4.465		$	4.726			17.2	%	$	4.033		$	4.726			17.2	%
Fixed Portion of Variable Contracts
Deposits	$	0.662		$	0.746		$	0.853		$	0.856		$	0.879			32.8	%	$	1.197		$	1.735			44.9	%
Withdrawals and deaths		(0.155	)		(0.181	)		(0.158	)		(0.124	)		(0.110	)		29.0	%		(0.306	)		(0.234	)		23.5	%
Net flows	$	0.507		$	0.565		$	0.695		$	0.732		$	0.769			51.7	%	$	0.891		$	1.501			68.5	%
Fixed Portion of Variable Contract Account Values	$	3.458		$	3.470		$	3.470		$	3.469		$	3.478			0.6	%	$	3.458		$	3.478			0.6	%
Variable Annuities - Including Fixed Portion of Variable Contracts
Deposits	$	2.957		$	2.993		$	3.445		$	2.721		$	2.944			-0.4	%	$	5.492		$	5.665			3.2	%
Withdrawals and deaths		(1.402	)		(1.477	)		(1.525	)		(1.383	)		(1.339	)		4.5	%		(2.732	)		(2.722	)		0.4	%
Net flows	$	1.555		$	1.516		$	1.920		$	1.338		$	1.605			3.2	%	$	2.760		$	2.943			6.6	%
		-			-			-			-			-						-			-
Variable Contract Account Values	$	58.629		$	61.764		$	62.112		$	58.435		$	59.333			1.2	%	$	58.629		$	59.333			1.2	%
Average Daily Variable Annuity Separate Account Values	$	53.465		$	55.827		$	58.628		$	55.318		$	57.763			8.0	%	$	51.327		$	56.541			10.2	%

																Change									Change
Interest Rate Spread (1)																(Basis Points)									(Basis Points)
Fixed maturity securities, mortgage loans on real estate and other, net of investment expenses		5.82	%		5.82	%		5.85	%		5.85	%		5.88	%		6			5.84	%		5.86	%		2
Commercial mortgage loan prepayment and bond make whole premiums		0.08	%		0.05	%		0.08	%		0.03	%		0.00	%		(8	)		0.06	%		0.02	%		(4	)
Alternative investments		0.02	%		-0.03	%		0.00	%		-0.01	%		-0.01	%		(3	)		0.02	%		-0.01	%		(3	)
Net investment income yield on reserves		5.92	%		5.84	%		5.93	%		5.87	%		5.87	%		(5	)		5.92	%		5.87	%		(5	)
Interest rate credited to contract holders		3.73	%		3.77	%		3.76	%		3.81	%		3.73	%		-			3.68	%		3.77	%		9
Interest rate spread		2.19	%		2.07	%		2.17	%		2.06	%		2.14	%		(5	)		2.24	%		2.10	%		(14	)
Variable Annuity Expense Assessments (in millions) (2)	$	249.7		$	267.2		$	286.6		$	271.4		$	287.0			14.9	%	$	474.6		$	558.4			17.7	%
GLB Expense Assessments (in millions) (3)	$	27.2		$	31.7		$	37.1		$	39.6		$	42.7			57.0	%	$	51.5		$	82.3			59.8	%
Components of Attributed Fees on GLB (in millions)
Attributed fee included in operating revenues and income from operations (4)	$	3.5		$	3.8		$	4.4		$	15.8		$	17.0		NM			$	6.7		$	32.8		NM
Attributed fee excluded from operating revenues and income from operations (5)		12.3			14.0			17.0			19.6			22.5			82.9	%		23.2			42.1			81.5	%
Total Attributed Fees on GLB	$	15.8		$	17.8		$	21.4		$	35.4		$	39.5			150.0	%	$	29.9		$	74.9			150.5	%
GLB Account Values by Type
Guaranteed withdrawal benefits (6)	$	16.851		$	18.364		$	18.935		$	18.255		$	19.301			14.5	%	$	16.851		$	19.301			14.5	%
Guaranteed income benefits (7)		6.184			7.319			8.372			8.632			9.370			51.5	%		6.184			9.370			51.5	%
Total GLB Account Values	$	23.035		$	25.683		$	27.307		$	26.887		$	28.671			24.5	%	$	23.035		$	28.671			24.5	%

(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 invested assets on reserves.  We exclude net investment income earned on investments supporting statutory surplus, reverse repurchase agreement interest expense and inter-segment cash management account interest expense from our yield and spread calculations.  The average crediting rate is calculated using interest credited before DSI amortization, plus the immediate annuity reserve change (included within benefits),  divided by average fixed account values net of co-insured account values. Fixed account values reinsured under modified co-insurance agreements are included in account values for this calculation since assets (and therefore margin) are retained under these agreements.

(2) Comprised of the variable annuity expense assessments included in the expense assessments line item on page 15 and the amounts presented in the components of attributed fees on GLB as described in footnotes 6 and 7 and disclosed above.

(3) Comprised of the GLB expense assessments included in the expense assessments line item on page 15 and the amounts presented in the components of attributed fees on GLB as described in footnotes 6 and 7 and disclosed above.

(4) The portion of the GLB rider fees calculated as the attributed fees in excess of the net valuation premium. The attributed fees are the fees used in the calculation of the embedded derivative. The net valuation premium represents the rider fees equal to the net present value of future benefit costs.  This portion of the attributed fee is reported in realized gain (loss) and is included in income from operations and operating revenues.

(5) Represents the portion of rider fee revenue for GLB required to fund the net valuation premium.  This portion of the attributed fee is reported in realized gain (loss) and is excluded in income from operations and operating revenues.

(6) Guaranteed withdrawal benefits include features that offer the contract holder a guarantee equal to the initial deposit (or contract value, if elected after issue), adjusted for any subsequent purchase payments or withdrawals.

(7) For our guaranteed income benefits, we offer other product riders allowing variable annuity contract holders access and control during the income distribution phase of their contract.  This added flexibility allows the contract holder to access the account value for transfers, additional withdrawals and other service features, such as portfolio rebalancing.

6/30/2008																									PAGE 18
Employer Markets - Defined Contribution
Income Statements and Operational Data
Unaudited (millions of dollars)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Operating Revenues
Surrender charges	$	2.2		$	1.8		$	1.8		$	1.9		$	1.5			-31.8	%	$	4.3		$	3.4			-20.9	%
Expense assessments		63.0			63.5			64.7			59.3			59.3			-5.9	%		122.7			118.6			-3.3	%
Net investment income		182.2			172.9			173.3			171.7			174.8			-4.1	%		362.5			346.5			-4.4	%
Operating realized gain (1)		-			-			-			-			0.1		NM				-			0.1		NM
Other revenues and fees		4.6			5.2			3.5			4.8			3.7			-19.6	%		9.3			8.5			-8.6	%
Total Operating Revenues		252.0			243.4			243.3			237.7			239.4			-5.0	%		498.8			477.1			-4.4	%
Operating Expenses
Benefits		-			-			-			-			0.1		NM				-			0.1		NM
Interest credited to contract holder funds		104.6			104.6			104.8			105.9			107.0			2.3	%		209.0			212.9			1.9	%
Operating and acquisition expenses		80.6			84.7			77.3			76.3			75.4			-6.5	%		152.2			151.7			-0.3	%
Total Operating Expenses		185.2			189.3			182.1			182.2			182.5			-1.5	%		361.2			364.7			1.0	%
Income from operations before federal income taxes		66.8			54.1			61.2			55.5			56.9			-14.8	%		137.6			112.4			-18.3	%
		-			-			-			-			-						-			-
Federal income taxes		19.5			12.9			18.1			15.1			15.7			-19.5	%		40.6			30.8			-24.1	%
Income From Operations	$	47.3		$	41.2		$	43.1		$	40.4		$	41.2			-12.9	%	$	97.0		$	81.6			-15.9	%
Effective Tax Rate		29.2	%		23.8	%		29.6	%		27.2	%		27.6	%					29.5	%		27.4	%
Average Equity	$	906.6		$	901.4		$	902.7		$	906.4		$	933.7					$	921.3		$	920.0
Return on Average Equity		20.9	%		18.3	%		19.1	%		17.8	%		17.7	%					21.1	%		17.7	%
Income From Operations - Basis Points on Average Account Values - Annualized		53			46			47			46			46			(7	)		56			46			(9	)
Operating Realized Gain (1)
Guaranteed living benefits risk and profit charges (2)	$	-		$	-		$	-		$	-		$	0.1		NM			$	-		$	0.1		NM
Total Operating Realized Gain	$	-		$	-		$	-		$	-		$	0.1		NM			$	-		$	0.1		NM
Operating and Acquisition Expenses
Commissions	$	21.3		$	19.9		$	20.3		$	19.7		$	19.4			-8.9	%	$	40.5		$	39.1			-3.5	%
General and administrative expenses		54.9			59.8			53.7			51.9			52.0			-5.3	%		104.7			103.9			-0.8	%
Taxes, licenses and fees		4.4			2.2			2.1			4.4			3.0			-31.8	%		9.5			7.4			-22.1	%
Total commissions and expenses incurred		80.6			81.9			76.1			76.0			74.4			-7.7	%		154.7			150.4			-2.8	%
Less: commissions and expenses capitalized		(22.5	)		(23.7	)		(23.7	)		(23.6	)		(22.2	)		1.3	%		(44.6	)		(45.8	)		-2.7	%
Amortization of DAC and VOBA, net of interest		22.5			26.5			24.9			23.9			23.2			3.1	%		42.1			47.1			11.9	%
Net Operating and Acquisition Expenses	$	80.6		$	84.7		$	77.3		$	76.3		$	75.4			-6.5	%	$	152.2		$	151.7			-0.3	%
General and Administrative Expenses - Basis Points on Average Account Values - Annualized (3)		62			67			59			59			59			(3	)		60			59			(1	)

Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	489.4		$	541.9		$	531.8		$	513.8		$	564.2		$	497.6		$	513.8
Cumulative effect of adoption of SOP 05-1		-			-			-			-			-			(1.4	)		-
Inter-segment transfer		-			-			-			6.9			-			-			6.9
Deferrals		22.5			23.7			23.7			23.6			22.2			44.6			45.8
Amortization, net of interest:
Unlocking		(2.0	)		(5.0	)		(1.2	)		(2.5	)		0.1			(2.5	)		(2.4	)
Other amortization		(20.5	)		(21.5	)		(23.7	)		(21.4	)		(23.3	)		(39.6	)		(44.7	)
Deferrals, net of amortization included in operating and acquisition expenses		-			(2.8	)		(1.2	)		(0.3	)		(1.0	)		2.5			(1.3	)
Adjustment related to realized (gains) losses on available-for-sale securities		(0.8	)		(0.6	)		3.4			0.6			1.0			(2.9	)		1.6
Adjustment related to unrealized (gains) losses on available-for-sale securities		53.3			(6.7	)		(20.2	)		43.2			65.5			46.1			108.7
Balance at End-of-Period	$	541.9		$	531.8		$	513.8		$	564.2		$	629.7		$	541.9		$	629.7
Roll Forward of DSI
Balance at beginning-of-period	$	0.2		$	0.3		$	0.4		$	0.4		$	1.9		$	0.1		$	0.4
Inter-segment transfer		-			-			-			1.3			-			-			1.3
Deferrals		0.1			0.1			-			0.2			0.2			0.2			0.4
Amortization, net of interest:
Other amortization		-			-			-			-			(0.1	)		-			(0.1	)
Deferrals, net of amortization included in interest credited		0.1			0.1			-			0.2			0.1			0.2			0.3
Balance at End-of-Period	$	0.3		$	0.4		$	0.4		$	1.9		$	2.0		$	0.3		$	2.0

(1)   Included in income from operations.

(2)  The portion of the rider fee revenue for GLB calculated as the attributed fee in excess of net valuation premium.

(3)  Includes distribution costs.

																						PAGE 19
Employer Markets - Defined Contribution
Account Value Roll Forward
Unaudited (in billions)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Fixed Annuities
Balance at beginning-of-period	$	10.993		$	10.940		$	10.891		$	10.889		$	11.217			2.0	%	$	11.006		$	10.889			-1.1	%
Gross deposits		0.233			0.305			0.267			0.332			0.280			20.2	%		0.531			0.612			15.3	%
Withdrawals and deaths		(0.376	)		(0.450	)		(0.411	)		(0.370	)		(0.380	)		-1.1	%		(0.775	)		(0.750	)		3.2	%
Net flows		(0.143	)		(0.145	)		(0.144	)		(0.038	)		(0.100	)		30.1	%		(0.244	)		(0.138	)		43.4	%
Transfer from (to) variable annuities		(0.012	)		(0.011	)		0.031			0.172			0.073		NM				(0.028	)		0.245		NM
Inter-segment transfer		-			-			-			0.089			-		NM				-			0.089		NM
Interest credited		0.102			0.107			0.111			0.105			0.104			2.0	%		0.206			0.209			1.5	%
Balance at End-of-Period  (1)	$	10.940		$	10.891		$	10.889		$	11.217		$	11.294			3.2	%	$	10.940		$	11.294			3.2	%
Variable Annuities
Balance at beginning-of-period	$	17.676		$	18.480		$	18.581		$	17.876		$	16.292			-7.8	%	$	17.475		$	17.876			2.3	%
Gross deposits		0.577			0.564			0.560			0.674			0.561			-2.8	%		1.232			1.235			0.2	%
Withdrawals and deaths		(0.747	)		(0.810	)		(0.842	)		(0.833	)		(0.646	)		13.5	%		(1.560	)		(1.479	)		5.2	%
Net flows		(0.170	)		(0.246	)		(0.282	)		(0.159	)		(0.085	)		50.0	%		(0.328	)		(0.244	)		25.6	%
Transfer from (to) fixed annuities		0.007			(0.028	)		(0.012	)		(0.143	)		(0.058	)	NM				0.011			(0.201	)	NM
Inter-segment transfer		-			-			-			0.206			-		NM				-			0.206		NM
Investment increase and change in market value		0.967			0.375			(0.411	)		(1.488	)		0.046			-95.2	%		1.322			(1.442	)	NM
Balance at End-of-Period (2)	$	18.480		$	18.581		$	17.876		$	16.292		$	16.195			-12.4	%	$	18.480		$	16.195			-12.4	%
Total Annuities
Balance at beginning-of-period	$	28.669		$	29.420		$	29.472		$	28.765		$	27.509			-4.0	%	$	28.481		$	28.765			1.0	%
Gross deposits		0.810			0.869			0.827			1.006			0.841			3.8	%		1.763			1.847			4.8	%
Withdrawals and deaths		(1.123	)		(1.260	)		(1.253	)		(1.203	)		(1.026	)		8.6	%		(2.335	)		(2.229	)		4.5	%
Net flows		(0.313	)		(0.391	)		(0.426	)		(0.197	)		(0.185	)		40.9	%		(0.572	)		(0.382	)		33.2	%
Transfers between fixed and variable accounts		(0.005	)		(0.039	)		0.019			0.029			0.015		NM				(0.017	)		0.044		NM
Inter-segment transfer		-			-			-			0.295			-		NM				-			0.295		NM
Interest credited and change in market value		1.069			0.482			(0.300	)		(1.383	)		0.150			-86.0	%		1.528			(1.233	)	NM
Balance at End-of-Period	$	29.420		$	29.472		$	28.765		$	27.509		$	27.489			-6.6	%	$	29.420		$	27.489			-6.6	%
Alliance and Smart Future Mutual Funds
Balance at beginning-of-period	$	5.807		$	6.543		$	7.165		$	7.293		$	7.255			24.9	%	$	5.175		$	7.293			40.9	%
Plan/participant rollovers		0.217			0.411			0.168			0.221			0.285			31.3	%		0.496			0.506			2.0	%
Additional contributions		0.246			0.245			0.269			0.324			0.295			19.9	%		0.501			0.619			23.6	%
Gross deposits		0.463			0.656			0.437			0.545			0.580			25.3	%		0.997			1.125			12.8	%
Withdrawals and deaths		(0.077	)		(0.132	)		(0.102	)		(0.068	)		(0.158	)	NM				(0.131	)		(0.226	)		-72.5	%
Net flows		0.386			0.524			0.335			0.477			0.422			9.3	%		0.866			0.899			3.8	%
Transfers		0.040			(0.013	)		(0.023	)		(0.070	)		(0.026	)	NM				0.045			(0.096	)	NM
Interest credited and change in market value		0.310			0.111			(0.184	)		(0.445	)		(0.098	)	NM				0.457			(0.543	)	NM
Balance at End-of-Period (3)	$	6.543		$	7.165		$	7.293		$	7.255		$	7.553			15.4	%	$	6.543		$	7.553			15.4	%
Total Annuities and Mutual Funds
Balance at beginning-of-period	$	34.476		$	35.963		$	36.637		$	36.058		$	34.764			0.8	%	$	33.656		$	36.058			7.1	%
Gross deposits		1.273			1.525			1.264			1.551			1.421			11.6	%		2.760			2.972			7.7	%
Withdrawals and deaths		(1.200	)		(1.392	)		(1.355	)		(1.271	)		(1.184	)		1.3	%		(2.466	)		(2.455	)		0.4	%
Net flows		0.073			0.133			(0.091	)		0.280			0.237			224.7	%		0.294			0.517			75.9	%
Transfers		0.035			(0.052	)		(0.004	)		(0.041	)		(0.011	)	NM				0.028			(0.052	)	NM
Inter-segment transfer		-			-			-			0.295			-		NM				-			0.295		NM
Interest credited and change in market value		1.379			0.593			(0.484	)		(1.828	)		0.052			-96.2	%		1.985			(1.776	)	NM
Balance at End-of-Period	$	35.963		$	36.637		$	36.058		$	34.764		$	35.042			-2.6	%	$	35.963		$	35.042			-2.6	%
Variable Annuities Under Agreement - Included Above	$	0.017		$	0.018		$	0.017		$	0.015		$	0.014			-17.6	%	$	0.017		$	0.014			-17.6	%
Incremental Deposits: (4)
Fixed annuities	$	0.224		$	0.220		$	0.197		$	0.285		$	0.258			15.2	%	$	0.506		$	0.543			7.3	%
Variable annuities		0.631			0.556			0.551			0.667			0.553			-12.4	%		1.211			1.220			0.7	%
Total annuities incremental deposits		0.855			0.776			0.748			0.952			0.811			-5.1	%		1.717			1.763			2.7	%
Total Alliance mutual funds incremental deposits		0.464			0.656			0.437			0.545			0.580			25.0	%		0.997			1.125			12.8	%
Total Incremental Deposits	$	1.319		$	1.432		$	1.185		$	1.497		$	1.391			5.5	%	$	2.714		$	2.888			6.4	%

(1) Includes fixed annuity products offered under our mutual fund products and the fixed portion of variable annuities.

(2)  Excludes the fixed portion of variable annuities.

(3) Represents amounts attributable to mutual fund net flows.  Mutual fund account values are not included in the separate accounts reported on our Consolidated Balance Sheets.

(4)  Represents gross deposits reduced by transfers from other Lincoln products.

6/30/2008																						PAGE 20
Employer Markets - Defined Contribution
Account Value Roll Forward - By Product and Supplemental Data
Unaudited (in billions)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Total Micro - Small Segment
Balance at beginning-of-period	$	7.689		$	8.012		$	8.077		$	7.798		$	7.218			-6.1	%	$	7.535		$	7.798			3.5	%
Gross deposits		0.378			0.391			0.365			0.498			0.389			2.9	%		0.838			0.887			5.8	%
Withdrawals and deaths		(0.434	)		(0.481	)		(0.565	)		(0.569	)		(0.395	)		9.0	%		(0.885	)		(0.964	)		-8.9	%
Net flows		(0.056	)		(0.090	)		(0.200	)		(0.071	)		(0.006	)		89.3	%		(0.047	)		(0.077	)		-63.8	%
Transfers between fixed and variable accounts		-			-			-			(0.012	)		-		NM				(0.005	)		(0.012	)	NM
Investment increase and change in market value		0.379			0.155			(0.079	)		(0.497	)		0.074			-80.5	%		0.529			(0.423	)	NM
Balance at End-of-Period	$	8.012		$	8.077		$	7.798		$	7.218		$	7.286			-9.1	%	$	8.012		$	7.286			-9.1	%
Total Mid - Large Segment
Balance at beginning-of-period	$	7.734		$	8.555		$	9.232		$	9.463		$	9.621			24.4	%	$	6.975		$	9.463			35.7	%
Gross deposits		0.589			0.861			0.609			0.769			0.748			27.0	%		1.302			1.517			16.5	%
Withdrawals and deaths		(0.132	)		(0.263	)		(0.212	)		(0.159	)		(0.299	)	NM				(0.250	)		(0.458	)		-83.2	%
Net flows		0.457			0.598			0.397			0.610			0.449			-1.8	%		1.052			1.059			0.7	%
Transfers between fixed and variable accounts		0.036			(0.051	)		(0.003	)		(0.029	)		(0.011	)	NM				0.037			(0.040	)	NM
Investment increase and change in market value		0.328			0.130			(0.163	)		(0.423	)		(0.074	)	NM				0.491			(0.497	)	NM
Balance at End-of-Period	$	8.555		$	9.232		$	9.463		$	9.621		$	9.985			16.7	%	$	8.555		$	9.985			16.7	%
Total Multi-Fund® and Other Variable Annuities
Balance at beginning-of-period	$	19.053		$	19.396		$	19.328		$	18.797		$	17.925			-5.9	%	$	19.146		$	18.797			-1.8	%
Gross deposits		0.306			0.273			0.290			0.284			0.284			-7.2	%		0.620			0.568			-8.4	%
Withdrawals and deaths		(0.634	)		(0.648	)		(0.578	)		(0.543	)		(0.490	)		22.7	%		(1.331	)		(1.033	)		22.4	%
Net flows		(0.328	)		(0.375	)		(0.288	)		(0.259	)		(0.206	)		37.2	%		(0.711	)		(0.465	)		34.6	%
Transfers between fixed and variable accounts		(0.001	)		(0.001	)		(0.001	)		-			(0.000	)		100.0	%		(0.004	)		(0.000	)		100.0	%
Inter-segment transfer		-			-			-			0.295			-		NM				-			0.295		NM
Investment increase and change in market value		0.672			0.308			(0.242	)		(0.908	)		0.052			-92.3	%		0.965			(0.856	)	NM
Balance at End-of-Period	$	19.396		$	19.328		$	18.797		$	17.925		$	17.771			-8.4	%	$	19.396		$	17.771			-8.4	%
Total Annuities and Mutual Funds
Balance at beginning-of-period	$	34.476		$	35.963		$	36.637		$	36.058		$	34.764			0.8	%	$	33.656		$	36.058			7.1	%
Gross deposits		1.273			1.525			1.264			1.551			1.421			11.6	%		2.760			2.972			7.7	%
Withdrawals and deaths		(1.200	)		(1.392	)		(1.355	)		(1.271	)		(1.184	)		1.3	%		(2.466	)		(2.455	)		0.4	%
Net flows		0.073			0.133			(0.091	)		0.280			0.237			224.7	%		0.294			0.517			75.9	%
Transfers between fixed and variable accounts		0.035			(0.052	)		(0.004	)		(0.041	)		(0.011	)	NM				0.028			(0.052	)	NM
Inter-segment transfer		-			-			-			0.295			-		NM				-			0.295		NM
Investment increase and change in market value		1.379			0.593			(0.484	)		(1.828	)		0.052			-96.2	%		1.985			(1.776	)	NM
Balance at End-of-Period (1)	$	35.963		$	36.637		$	36.058		$	34.764		$	35.042			-2.6	%	$	35.963		$	35.042			-2.6	%
Fixed Annuities - Excluding Fixed Portion of Variable Contracts
Deposits	$	0.1		$	0.2		$	0.2		$	0.2		$	0.2			28.1	%	$	0.3		$	0.4			24.1	%
Withdrawals and deaths		(0.140	)		(0.215	)		(0.203	)		(0.160	)		(0.198	)		-41.4	%		(0.305	)		(0.358	)		-17.4	%
Net flows	$	0.006		$	0.006		$	(0.014	)	$	0.080		$	(0.011	)	NM			$	0.039		$	0.069			76.9	%
Fixed Contract Account Values	$	4.917		$	4.943		$	4.996		$	5.166		$	5.221			6.2	%	$	4.917		$	5.221			6.2	%
Fixed Portion of Variable Contracts
Deposits	$	0.087		$	0.084		$	0.079		$	0.093		$	0.092			5.7	%	$	0.187		$	0.185			-1.1	%
Withdrawals and deaths		(0.236	)		(0.235	)		(0.208	)		(0.210	)		(0.182	)		22.9	%		(0.469	)		(0.392	)		16.4	%
Net flows	$	(0.149	)	$	(0.151	)	$	(0.129	)	$	(0.117	)	$	(0.090	)		39.6	%	$	(0.282	)	$	(0.207	)		26.6	%
Fixed Portion of Variable Contract Account Values	$	6.023		$	5.948		$	5.893		$	6.051		$	6.073			0.8	%	$	6.023		$	6.073			0.8	%
Variable Annuities - Including Fixed Portion of Variable Contracts
Deposits	$	0.664		$	0.648		$	0.639		$	0.767		$	0.653			-1.7	%	$	1.419		$	1.420			0.1	%
Withdrawals and deaths		(0.982	)		(1.045	)		(1.050	)		(1.043	)		(0.828	)		15.7	%		(2.029	)		(1.871	)		7.8	%
Net flows	$	(0.318	)	$	(0.397	)	$	(0.411	)	$	(0.276	)	$	(0.175	)		45.0	%	$	(0.610	)	$	(0.451	)		26.1	%
Variable Contract Account Values	$	24.504		$	24.528		$	23.769		$	22.343		$	22.268			-9.1	%	$	24.504		$	22.268			-9.1	%
Average Daily Variable Annuity Account Values	$	18.377		$	18.162		$	18.235		$	16.640		$	16.892			-8.1	%	$	17.982		$	16.766			-6.8	%
																Change									Change
Interest Rate Spread (2)																(Basis Points)									(Basis Points)
Fixed maturity securities, mortgage loans on real estate and other, net of investment expenses		5.95	%		6.04	%		6.00	%		5.93	%		5.89	%		(6	)		6.03	%		5.90	%		(13	)
Commercial mortgage loan prepayment and bond makewhole premiums		0.09	%		0.07	%		0.05	%		0.02	%		0.05	%		(4	)		0.06	%		0.04	%		(2	)
Alternative investments		0.10	%		-0.10	%		0.00	%		-0.03	%		-0.03	%		(13	)		0.09	%		-0.03	%		(12	)
Net investment income yield on reserves		6.14	%		6.01	%		6.05	%		5.92	%		5.91	%		(23	)		6.18	%		5.91	%		(27	)
Interest rate credited to contract holders		3.82	%		3.84	%		3.84	%		3.81	%		3.80	%		(2	)		3.81	%		3.80	%		(1	)
Interest rate spread		2.32	%		2.17	%		2.21	%		2.11	%		2.11	%		(21	)		2.37	%		2.11	%		(26	)

(1) Includes mutual fund account values.  Mutual funds are not included in the separate accounts reported on our Consolidated Balance Sheets.

(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 invested assets on reserves.  We exclude net investment income earned on investments supporting statutory surplus from our spread calculations.  The average crediting rate is calculated as interest credited before DSI amortization, plus the immediate annuity reserve change (included within benefits), divided by the average fixed account values, including the fixed portion of variable annuities.

6/30/2008	PAGE 21
Employer Markets - Executive Benefits
Income Statements and Operational Data
Unaudited (millions of dollars)

	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Operating Revenues
Insurance premiums	$	0.1		$	0.1		$	-		$	0.1		$	0.1			0.0	%	$	0.2		$	0.2			0.0	%
Surrender charges		-			-			0.1			-			-		NM				-			-		NM
Mortality assessments		8.2			8.4			9.0			9.1			7.6			-7.3	%		17.1			16.7			-2.3	%
Expense assessments		4.7			4.0			4.7			4.6			5.0			6.4	%		9.3			9.6			3.2	%
Net investment income		53.1			51.8			52.3			51.9			52.5			-1.1	%		108.9			104.4			-4.1	%
Other revenues and fees		-			(0.1	)		-			(0.1	)		0.2		NM				(0.1	)		0.1			200.0	%
Total Operating Revenues		66.1			64.2			66.1			65.6			65.4			-1.1	%		135.4			131.0			-3.2	%
Operating Expenses
Benefits		2.8			5.0			6.3			2.5			3.8			35.7	%		5.5			6.3			14.5	%
Interest credited to contract holder funds		38.1			37.8			38.0			38.4			38.6			1.3	%		76.3			77.0			0.9	%
Operating and acquisition expenses		8.8			8.7			3.7			6.7			6.4			-27.3	%		19.0			13.1			-31.1	%
Total Operating Expenses		49.7			51.5			48.0			47.6			48.8			-1.8	%		100.8			96.4			-4.4	%
Income from operations before federal income taxes		16.4			12.7			18.1			18.0			16.6			1.2	%		34.6			34.6			0.0	%
Federal income taxes		5.6			3.8			6.2			6.1			5.6			0.0	%		11.9			11.7			-1.7	%
Income From Operations	$	10.8		$	8.9		$	11.9		$	11.9		$	11.0			1.9	%	$	22.7		$	22.9			0.9	%
Effective Tax Rate		34.1	%		29.9	%		34.3	%		33.9	%		33.7	%					34.4	%		33.8	%
Average Equity	$	345.5		$	336.5		$	346.3		$	358.1		$	361.8					$	351.3		$	360.0
Return on Average Equity		12.5	%		10.6	%		13.7	%		13.3	%		12.2	%					12.9	%		12.7	%
Operating and Acquisition Expenses
Commissions	$	6.8		$	6.5		$	14.0		$	11.9		$	6.4			-5.9	%	$	13.3		$	18.3			37.6	%
General and administrative expenses		1.9			3.0			2.3			2.7			2.6			36.8	%		3.6			5.3			47.2	%
Taxes, licenses and fees		1.0			1.0			1.5			2.0			1.0			0.0	%		2.2			3.0			36.4	%
Total commissions and expenses incurred		9.7			10.5			17.8			16.6			10.0			3.1	%		19.1			26.6			39.3	%
Less: commissions and expenses capitalized		(6.7	)		(6.6	)		(14.1	)		(11.6	)		(6.1	)		9.0	%		(13.6	)		(17.7	)		-30.1	%
Amortization of DAC and VOBA, net of interest		5.8			4.8			-			1.7			2.5			-56.9	%		13.5			4.2			-68.9	%
Net Operating and Acquisition Expenses	$	8.8		$	8.7		$	3.7		$	6.7		$	6.4			-27.3	%	$	19.0		$	13.1			-31.1	%
General and Administrative Expenses - Basis Points onAverage Account Values - Annualized(1)		18			27			21			24			23			5			17			24			7

Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	260.5		$	276.2		$	273.2		$	283.0		$	298.1		$	265.3		$	283.0
Deferrals		6.7			6.6			14.1			11.6			6.1			13.6			17.7
Amortization, net of interest:
Unlocking		(2.3	)		(1.5	)		2.3			1.1			0.4			(5.0	)		1.5
Other amortization		(3.5	)		(3.3	)		(2.3	)		(2.8	)		(2.9	)		(8.5	)		(5.7	)
Deferrals, net of amortization included in operating and acquisition expenses		0.9			1.8			14.1			9.9			3.6			0.1			13.5
Adjustment related to realized (gains) losses on available-for-sale securities		(0.1	)		0.1			0.6			0.2			(0.2	)		(0.6	)		-
Adjustment related to unrealized (gains) losses on available-for-sale securities		14.9			(4.9	)		(4.9	)		5.0			20.1			11.4			25.1
Balance at End-of-Period	$	276.2		$	273.2		$	283.0		$	298.1		$	321.6		$	276.2		$	321.6
Roll Forward of DFEL
Balance at beginning-of-period	$	22.0		$	21.9		$	22.4		$	23.8		$	25.5		$	21.7		$	23.8
Deferrals		0.8			0.7			1.4			1.8			0.6			1.9			2.4
Amortization, net of interest:
Unlocking		(0.6	)		0.1			0.3			0.1			(0.1	)		(0.9	)		-
Other amortization		(0.3	)		(0.3	)		(0.3	)		(0.2	)		(0.1	)		(0.8	)		(0.3	)
Deferrals, net of amortization included in expense assessments		(0.1	)		0.5			1.4			1.7			0.4			0.2			2.1
Balance at End-of-Period	$	21.9		$	22.4		$	23.8		$	25.5		$	25.9		$	21.9		$	25.9
(1)  Includes distribution costs.

6/30/2008	PAGE 22
Employer Markets - Executive Benefits
Account Value Roll Forward and Supplemental Data
Unaudited (in billions)

	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
COLI/BOLI
Balance at beginning-of-period	$	4.264		$	4.353		$	4.391		$	4.436		$	4.460			4.6	%	$	4.305		$	4.436			3.0	%
Deposits (1)		0.079			0.052			0.107			0.165			0.110			39.2	%		0.144			0.275			91.0	%
Withdrawals and deaths (1)		(0.053	)		(0.057	)		(0.070	)		(0.094	)		(0.060	)		-13.2	%		(0.193	)		(0.154	)		20.2	%
Net flows		0.026			(0.005	)		0.037			0.071			0.050			92.3	%		(0.049	)		0.121		NM
Contract holder assessments		(0.017	)		(0.017	)		(0.019	)		(0.020	)		(0.017	)		0.0	%		(0.035	)		(0.037	)		-5.7	%
Interest credited and change in market value		0.080			0.060			0.027			(0.027	)		0.033			-58.8	%		0.132			0.006			-95.5	%
Balance at End-of-Period	$	4.353		$	4.391		$	4.436		$	4.460		$	4.526			4.0	%	$	4.353		$	4.526			4.0	%
COLI/BOLI In Force	$	14.809		$	14.900		$	15.292		$	15.826		$	14.939			0.9	%	$	14.809		$	14.939			0.9	%

(1)    Deposits include $0.044 billion and $0.023 billion and withdrawals and deaths include $(0.044) billion and $(0.023) billion for the first and second quarters of 2008, respectively, related to the exchange of legacy Jefferson-Pilot products with new Lincoln products.

6/30/2008	PAGE 23
Employer Markets - Group Protection
Income Statements and Operational Data
Unaudited (millions of dollars)

	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Operating Revenues
Insurance premiums	$	361.3		$	336.8		$	349.7		$	370.4		$	393.0			8.8	%	$	692.7		$	763.4			10.2	%
Net investment income		28.5			29.5			29.5			27.7			30.5			7.0	%		56.4			58.2			3.2	%
Other revenues and fees		1.2			1.2			1.4			1.3			1.4			16.7	%		2.3			2.7			17.4	%
Total Operating Revenues		391.0			367.5			380.6			399.4			424.9			8.7	%		751.4			824.3			9.7	%
Operating Expenses
Benefits		265.6			234.9			252.1			269.1			285.7			7.6	%		512.3			554.8			8.3	%
Interest credited to contract holder funds		-			0.1			-			0.2			0.3		NM				-			0.5		NM
Operating and acquisition expenses		80.7			81.4			85.1			89.6			89.3			10.7	%		158.9			178.9			12.6	%
Total Operating Expenses		346.3			316.4			337.2			358.9			375.3			8.4	%		671.2			734.2			9.4	%
Income from operations before federal income taxes		44.7			51.1			43.4			40.5			49.6			11.0	%		80.2			90.1			12.3	%
Federal income taxes		15.7			17.9			15.2			14.2			17.4			10.8	%		28.1			31.6			12.5	%
Income From Operations	$	29.0		$	33.2		$	28.2		$	26.3		$	32.2			11.0	%	$	52.1		$	58.5			12.3	%
Effective Tax Rate		35.1	%		35.0	%		35.0	%		35.1	%		35.1	%					35.0	%		35.1	%
Average Equity	$	917.5		$	936.2		$	956.4		$	975.8		$	985.3					$	916.3		$	980.5
Return on Average Equity		12.6	%		14.2	%		11.8	%		10.8	%		13.1	%					11.4	%		11.9	%
Operating and Acquisition Expenses
Commissions	$	41.4		$	40.4		$	43.1		$	43.5		$	43.7			5.6	%	$	80.8		$	87.2			7.9	%
General and administrative expenses		37.5			37.9			42.8			41.7			40.8			8.8	%		70.2			82.5			17.5	%
Taxes, licenses and fees		9.5			8.1			6.2			10.0			9.0			-5.3	%		19.2			19.0			-1.0	%
Total commissions and expenses incurred		88.4			86.4			92.1			95.2			93.5			5.8	%		170.2			188.7			10.9	%
Less: commissions and expenses capitalized		(13.5	)		(13.1	)		(16.7	)		(13.7	)		(13.0	)		3.7	%		(24.7	)		(26.7	)		-8.1	%
Amortization of DAC and VOBA, net of interest		5.8			8.1			9.7			8.1			8.8			51.7	%		13.4			16.9			26.1	%
Net Operating and Acquisition Expenses	$	80.7		$	81.4		$	85.1		$	89.6		$	89.3			10.7	%	$	158.9		$	178.9			12.6	%
General and Administrative Expenses as a Percentage of Premiums		10.4	%		11.3	%		12.2	%		11.3	%		10.4	%					10.1	%		10.8	%
Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	103.7		$	111.4		$	116.4		$	123.4		$	129.0					$	137.6		$	123.4
Cumulative effect of adoption of SOP 05-1		-			-			-			-			-						(37.5	)		-
Deferrals		13.5			13.1			16.7			13.7			13.0						24.7			26.7
Amortization, net of interest		(5.8	)		(8.1	)		(9.7	)		(8.1	)		(8.8	)					(13.4	)		(16.9	)
Deferrals, net of amortization included in operating and acquisition expenses		7.7			5.0			7.0			5.6			4.2						11.3			9.8
Balance at End-of-Period	$	111.4		$	116.4		$	123.4		$	129.0		$	133.2					$	111.4		$	133.2
Annualized Sales
Life	$	23.8		$	22.0		$	53.9		$	21.3		$	23.4			-1.7	%	$	46.3		$	44.7			-3.5	%
Disability		28.9			30.5			72.1			24.9			29.9			3.5	%		57.5			54.8			-4.7	%
Dental		9.5			8.3			16.6			7.9			11.3			18.9	%		19.0			19.2			1.1	%
Premiums
Life	$	125.0		$	123.4		$	126.5		$	132.9		$	133.8			7.0	%	$	243.6		$	266.7			9.5	%
Disability		150.4			151.1			155.2			163.2			167.0			11.0	%		295.2			330.2			11.9	%
Dental		33.5			34.1			35.2			36.5			37.4			11.6	%		66.5			73.9			11.1	%
Other		52.4			28.2			32.8			37.8			54.8			4.6	%		87.4			92.6			5.9	%
Total	$	361.3		$	336.8		$	349.7		$	370.4		$	393.0			8.8	%	$	692.7		$	763.4			10.2	%
Product Line Results
Life	$	10.0		$	11.0		$	11.2		$	10.1		$	11.4			14.0	%	$	18.6		$	21.5			15.6	%
Disability		18.1			18.8			13.7			15.4			19.9			9.9	%		31.4			35.3			12.4	%
Dental		(0.1	)		1.3			2.1			(0.3	)		(0.4	)	NM				0.1			(0.7	)	NM
Other		1.0			2.1			1.2			1.1			1.3			30.0	%		2.0			2.4			20.0	%
Total	$	29.0		$	33.2		$	28.2		$	26.3		$	32.2			11.0	%	$	52.1		$	58.5			12.3	%
Loss Ratios
Life		73.9	%		71.2	%		72.1	%		71.9	%		72.3	%		-2.2	%		74.5	%		72.1	%		-3.2	%
Disability		66.4	%		65.0	%		69.1	%		68.1	%		66.1	%		-0.5	%		67.9	%		67.1	%		-1.2	%
Dental		79.3	%		74.9	%		73.1	%		80.8	%		81.1	%		2.3	%		79.2	%		81.0	%		2.3	%
Combined Loss Ratios		70.8	%		68.6	%		70.7	%		71.0	%		70.2	%		-0.8	%		71.8	%		70.6	%		-1.7	%

6/30/2008	PAGE 24
Investment Management
Income Statements
Unaudited (millions of dollars)

	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Operating Revenues
Investment advisory fees - external	$	92.7		$	89.0		$	87.7		$	76.2		$	75.8			-18.2	%	$	183.0		$	152.0			-16.9	%
Investment advisory fees - inter-segment		19.6			22.6			20.3			20.0			20.6			5.1	%		44.1			40.6			-7.9	%
Other revenues and fees		38.7			38.5			31.0			24.1			27.9			-27.9	%		74.0			52.0			-29.7	%
Total Operating Revenues		151.0			150.1			139.0			120.3			124.3			-17.7	%		301.1			244.6			-18.8	%
Operating Expenses
Operating and administrative expenses		133.1			116.0			96.8			101.1			100.8			-24.3	%		257.7			201.9			-21.7	%
Total Operating Expenses		133.1			116.0			96.8			101.1			100.8			-24.3	%		257.7			201.9			-21.7	%
Income from operations before federal income taxes		17.9			34.1			42.2			19.2			23.5			31.3	%		43.4			42.7			-1.6	%
Federal income taxes		6.6			12.3			15.2			7.1			8.5			28.8	%		15.9			15.6			-1.9	%
Income From Operations	$	11.3		$	21.8		$	27.0		$	12.1		$	15.0			32.7	%	$	27.5		$	27.1			-1.5	%
Effective Tax Rate		36.9	%		36.1	%		36.0	%		37.0	%		36.2	%					36.6	%		36.5	%
Pre-Tax Operating Margin		11.9	%		22.7	%		30.4	%		16.0	%		18.9	%					14.4	%		17.5	%
After-Tax Operating Margin		7.5	%		14.5	%		19.4	%		10.1	%		12.1	%					9.1	%		11.1	%
Operating and Administrative Expenses
General and administrative expenses	$	116.8		$	100.5		$	81.0		$	87.6		$	85.9			-26.5	%	$	223.2		$	173.5			-22.3	%
Depreciation and amortization		2.5			2.5			2.3			2.2			2.1			-16.0	%		5.2			4.3			-17.3	%
Sub-advisory fees		8.4			7.7			8.1			7.2			7.4			-11.9	%		18.4			14.6			-20.7	%
Total general and administrative expenses		127.7			110.7			91.4			97.0			95.4			-25.3	%		246.8			192.4			-22.0	%
Taxes, licenses and fees		4.0			3.9			4.0			3.6			4.9			22.5	%		8.1			8.5			4.9	%
Amortization of intangibles		1.4			1.4			1.4			0.5			0.5			-64.3	%		2.8			1.0			-64.3	%
Total Operating and Administrative Expenses	$	133.1		$	116.0		$	96.8		$	101.1		$	100.8			-24.3	%	$	257.7		$	201.9			-21.7	%

6/30/2008	PAGE 25
Investment Management
Assets Under Management Roll Forward
Unaudited (in billions)

	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Retail Fixed
Balance at beginning-of-period	$	11.644		$	12.303		$	13.014		$	13.463		$	14.168			21.7	%	$	10.993		$	13.463			22.5	%
Sales (1)		1.496			1.466			1.635			1.981			1.533			2.5	%		2.861			3.514			22.8	%
Redemptions (2)		(1.062	)		(1.060	)		(1.330	)		(1.395	)		(1.238	)		-16.6	%		(1.971	)		(2.633	)		-33.6	%
Exchanges		(0.005	)		0.027			0.017			0.054			0.030		NM				0.009			0.084		NM
Net flows		0.429			0.433			0.322			0.640			0.325			-24.2	%		0.899			0.965			7.3	%
Net investment gains and change in market value		0.119			0.278			0.145			0.065			(0.095	)	NM				0.300			(0.030	)	NM
Transfer of assets to third-party (2)		(0.055	)		-			(0.018	)		-			-			100.0	%		(0.055	)		-			100.0	%
Transfer of assets to an intercompany manager (3)		0.166			-			-			-			-			-100.0	%		0.166			-			-100.0	%
Balance at End-of-Period (4)	$	12.303		$	13.014		$	13.463		$	14.168		$	14.398			17.0	%	$	12.303		$	14.398			17.0	%
Retail Equity
Balance at beginning-of-period	$	40.250		$	38.586		$	38.166		$	36.250		$	31.463			-21.8	%	$	39.627		$	36.250			-8.5	%
Sales (1)		1.779			1.345			1.957			1.514			1.063			-40.2	%		4.016			2.577			-35.8	%
Redemptions (2)		(2.487	)		(2.084	)		(2.903	)		(2.752	)		(2.292	)		7.8	%		(4.942	)		(5.044	)		-2.1	%
Exchanges		0.004			(0.029	)		(0.025	)		(0.057	)		(0.033	)	NM				(0.015	)		(0.090	)	NM
Net flows		(0.704	)		(0.768	)		(0.971	)		(1.295	)		(1.262	)		-79.3	%		(0.941	)		(2.557	)	NM
Net investment gains and change in market value		2.190			0.348			(0.915	)		(3.492	)		(0.431	)	NM				3.050			(3.923	)	NM
Transfer of assets to third-party (2)		(0.099	)		-			(0.030	)		-			-			100.0	%		(0.099	)		-			100.0	%
Transfer of assets to an intercompany manager (3)		(3.051	)		-			-			-			-			100.0	%		(3.051	)		-			100.0	%
Balance at End-of-Period (4)	$	38.586		$	38.166		$	36.250		$	31.463		$	29.770			-22.8	%	$	38.586		$	29.770			-22.8	%
Total Retail
Balance at beginning-of-period	$	51.894		$	50.889		$	51.180		$	49.713		$	45.631			-12.1	%	$	50.620		$	49.713			-1.8	%
Retail sales - annuities		0.903			0.891			0.953			1.562			0.786			-13.0	%		2.203			2.348			6.6	%
Retail sales - mutual funds		1.897			1.543			2.241			1.592			1.407			-25.8	%		3.649			2.999			-17.8	%
Retail sales - managed accounts and other		0.475			0.377			0.398			0.341			0.403			-15.2	%		1.025			0.744			-27.4	%
Total retail sales (1)		3.275			2.811			3.592			3.495			2.596			-20.7	%		6.877			6.091			-11.4	%
Redemptions (2)		(3.549	)		(3.144	)		(4.233	)		(4.147	)		(3.530	)		0.5	%		(6.913	)		(7.677	)		-11.1	%
Exchanges		(0.001	)		(0.002	)		(0.008	)		(0.003	)		(0.003	)	NM				(0.006	)		(0.006	)		0.0	%
Net flows		(0.275	)		(0.335	)		(0.649	)		(0.655	)		(0.937	)	NM				(0.042	)		(1.592	)	NM
Net investment gains and change in market value		2.309			0.626			(0.770	)		(3.427	)		(0.526	)	NM				3.350			(3.953	)	NM
Transfer of assets to third-party (2)		(0.154	)		-			(0.048	)		-			-			100.0	%		(0.154	)		-			100.0	%
Transfer of assets to an intercompany manager (3)		(2.885	)		-			-			-			-			100.0	%		(2.885	)		-			100.0	%
Balance at End-of-Period (4)	$	50.889		$	51.180		$	49.713		$	45.631		$	44.168			-13.2	%	$	50.889		$	44.168			-13.2	%
Institutional Fixed
Balance at beginning-of-period	$	23.469		$	23.565		$	24.837		$	12.746		$	12.409			-47.1	%	$	22.841		$	12.746			-44.2	%
Inflows (1)		1.513			2.234			0.577			0.242			0.330			-78.2	%		3.073			0.573			-81.4	%
Withdrawals/terminations		(1.271	)		(1.306	)		(0.673	)		(0.638	)		(0.556	)		56.3	%		(1.751	)		(1.195	)		31.8	%
Exchanges		-			(0.001	)		0.138			0.002			-		NM				-			0.002		NM
Net flows		0.242			0.927			0.042			(0.394	)		(0.226	)	NM				1.322			(0.620	)	NM
Net investment gains and change in market value		(0.146	)		0.345			0.180			0.057			(0.113	)		22.6	%		0.182			(0.056	)	NM
Transfer of assets to third-party (5)		-			-			(12.313	)		-			-		NM				(0.780	)		-			100.0	%
Balance at End-of-Period (4)	$	23.565		$	24.837		$	12.746		$	12.409		$	12.070			-48.8	%	$	23.565		$	12.070			-48.8	%
		-			-			-			-			-						-			-
Institutional Equity
Balance at beginning-of-period	$	22.782		$	23.271		$	23.699		$	22.898		$	20.498			-10.0	%	$	23.845		$	22.898			-4.0	%
Inflows (1)		1.363			0.702			1.653			0.986			0.580			-57.4	%		2.234			1.567			-29.9	%
Withdrawals/terminations		(1.753	)		(1.202	)		(1.996	)		(1.100	)		(0.889	)		49.3	%		(4.026	)		(1.990	)		50.6	%
Exchanges		-			(0.001	)		(0.001	)		(0.002	)		-		NM				-			(0.002	)	NM
Net flows		(0.390	)		(0.501	)		(0.344	)		(0.116	)		(0.309	)		20.8	%		(1.792	)		(0.425	)		76.3	%
Net investment gains and change in market value		1.242			0.929			(0.457	)		(2.284	)		(0.736	)	NM				1.581			(3.020	)	NM
Transfer of assets to an intercompany manager (3)		(0.363	)		-			-			-			-			100.0	%		(0.363	)		-			100.0	%
Balance at End-of-Period (4)	$	23.271		$	23.699		$	22.898		$	20.498		$	19.453			-16.4	%	$	23.271		$	19.453			-16.4	%
Total Institutional
Balance at beginning-of-period	$	46.251		$	46.836		$	48.536		$	35.644		$	32.907			-28.9	%	$	46.686		$	35.644			-23.7	%
Inflows (1)		2.876			2.936			2.230			1.228			0.910			-68.4	%		5.307			2.140			-59.7	%
Withdrawals/terminations		(3.024	)		(2.508	)		(2.669	)		(1.738	)		(1.445	)		52.2	%		(5.777	)		(3.185	)		44.9	%
Exchanges		-			(0.002	)		0.137			-			-		NM				-			-		NM
Net flows		(0.148	)		0.426			(0.302	)		(0.510	)		(0.535	)	NM				(0.470	)		(1.045	)	NM
Net investment gains and change in market value		1.096			1.274			(0.277	)		(2.227	)		(0.849	)	NM				1.763			(3.076	)	NM
Transfer of assets to third-party (5)		-			-			(12.313	)		-			-		NM				(0.780	)		-			100.0	%
Transfer of assets to an intercompany manager (3)		(0.363	)		-			-			-			-			100.0	%		(0.363	)		-			100.0	%
Balance at End-of-Period (4)	$	46.836		$	48.536		$	35.644		$	32.907		$	31.523			-32.7	%	$	46.836		$	31.523			-32.7	%
Total Retail and Institutional - At End-of-Period (4)	$	97.725		$	99.716		$	85.357		$	78.538		$	75.691			-22.5	%	$	97.725		$	75.691			-22.5	%
General Account Assets - At End-of-Period	$	66.423		$	67.324		$	67.417		$	67.339		$	65.997			-0.6	%	$	66.423		$	65.997			-0.6	%
Total Assets Under Management
at End-of-Period	$	164.148		$	167.040		$	152.774		$	145.877		$	141.688			-13.7	%	$	164.148		$	141.688			-13.7	%
Total Retail and Institutional - Net Flows (2)	$	(0.423	)	$	0.091		$	(0.951	)	$	(1.165	)	$	(1.472	)	NM			$	(0.512	)	$	(2.637	)	NM
Sub-Advised Assets, Included in Assets												��
Under Management Above
Retail	$	16.329		$	16.380		$	16.219		$	14.212		$	13.651			-16.4	%	$	16.329		$	13.651			-16.4	%
Institutional		4.594			4.734			4.570			4.071			3.794			-17.4	%		4.594			3.794			-17.4	%
Total Sub-Advised Assets	$	20.923		$	21.114		$	20.789		$	18.283		$	17.445			-16.6	%	$	20.923		$	17.445			-16.6	%

(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.  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 which did not impact Lincoln's consolidated assets under management.

(4)   Includes inter-segment and external assets under management.

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

6/30/2008	PAGE 25(B)
Investment Management
Assets Under Management Roll Forward (Continued) (1)
Unaudited (in billions)

	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Inter-Segment Assets - Retail and Institutional
Balance at beginning-of-period	$	12.982		$	10.226		$	10.175		$	9.672		$	9.191			-29.2	%	$	13.729		$	9.672			-29.6	%
Sales/inflows		0.708			0.544			0.743			0.718			0.375			-47.0	%		1.209			1.093			-9.6	%
Redemptions/withdrawals/terminations		(0.766	)		(0.754	)		(1.148	)		(0.679	)		(0.543	)		29.1	%		(1.500	)		(1.222	)		18.5	%
Exchanges		-			-			0.133			-			-		NM				-			-		NM
Net flows		(0.058	)		(0.210	)		(0.272	)		0.039			(0.168	)	NM				(0.291	)		(0.129	)		55.7	%
Net investment gains and change in market value		0.550			0.159			(0.231	)		(0.520	)		(0.028	)	NM				0.817			(0.548	)	NM
Transfer of assets to an intercompany manager		(3.248	)		-			-			-			-			100.0	%		(4.029	)		-			100.0	%
Balance at End-of-Period	$	10.226		$	10.175		$	9.672		$	9.191		$	8.995			-12.0	%	$	10.226		$	8.995			-12.0	%
Inter-Segment Assets - General Account at End-of-Period	$	66.423		$	67.324		$	67.417		$	67.339		$	65.997			-0.6	%	$	66.423		$	65.997			-0.6	%
Total Inter-Segment Assets at End-of-Period	$	76.649		$	77.499		$	77.089		$	76.530		$	74.992			-2.2	%	$	76.649		$	74.992			-2.2	%
Total External
Balance at beginning-of-period (2)	$	85.164		$	87.499		$	89.541		$	75.686		$	69.346			-18.6	%	$	83.577		$	75.686			-9.4	%
Sales/inflows		5.442			5.202			5.081			4.004			3.132			-42.4	%		10.976			7.136			-35.0	%
Redemptions/withdrawals/terminations		(5.807	)		(4.898	)		(5.754	)		(5.207	)		(4.433	)		23.7	%		(11.191	)		(9.640	)		13.9	%
Exchanges		(0.001	)		(0.003	)		(0.004	)		(0.003	)		(0.002	)		-100.0	%		(0.006	)		(0.005	)		16.7	%
Net flows		(0.366	)		0.301			(0.678	)		(1.205	)		(1.303	)	NM				(0.221	)		(2.509	)	NM
Net investment gains and change in market value		2.854			1.741			(0.817	)		(5.134	)		(1.347	)	NM				4.296			(6.481	)	NM
Transfer of assets to third-party		(0.153	)		-			(12.361	)		-			-			100.0	%		(0.153	)		-			100.0	%
Balance at End-of-Period	$	87.499		$	89.541		$	75.686		$	69.346		$	66.696			-23.8	%	$	87.499		$	66.696			-23.8	%
(1) This roll forward breaks out total assets under management by inter-segment and external balances which include both retail and institutional assets under management.
(2) Includes Delaware's VIP funds. Lincoln Financial insurance subsidiaries as well as unaffiliated insurers participate in these funds.

6/30/2008	PAGE 26
Lincoln UK
Income Statements
Unaudited (millions of dollars)

	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Operating Revenues
Insurance premiums	$	24.4		$	25.5		$	21.2		$	19.0		$	26.4			8.2	%	$	48.5		$	45.4			-6.4	%
Mortality assessments		8.9			9.2			9.1			9.1			9.1			2.2	%		18.9			18.2			-3.7	%
Expense assessments		39.9			33.0			46.5			37.1			42.6			6.8	%		77.1			79.7			3.4	%
Net investment income		19.4			20.9			21.5			20.3			19.8			2.1	%		38.7			40.1			3.6	%
Other revenues and fees		-			-			-			0.1			-		NM				0.1			0.1			0.0	%
Total Operating Revenues		92.6			88.6			98.3			85.6			97.9			5.7	%		183.3			183.5			0.1	%
Operating Expenses
Benefits		34.4			30.2			36.9			30.7			30.2			-12.2	%		70.5			60.9			-13.6	%
Operating and acquisition expenses		40.2			42.5			41.9			38.5			40.0			-0.5	%		78.1			78.5			0.5	%
Total Operating Expenses		74.6			72.7			78.8			69.2			70.2			-5.9	%		148.6			139.4			-6.2	%
Income from operations before federal income taxes		18.0			15.9			19.5			16.4			27.7			53.9	%		34.7			44.1			27.1	%
Federal income taxes		6.3			5.6			6.8			5.7			9.7			54.0	%		12.2			15.5			27.0	%
Income From Operations	$	11.7		$	10.3		$	12.7		$	10.7		$	18.0			53.8	%	$	22.5		$	28.6			27.1	%
Effective Tax Rate		35.0	%		35.2	%		34.9	%		34.8	%		35.0	%					35.2	%		35.1	%
Average Equity	$	384.9		$	379.1		$	368.5		$	375.7		$	384.6					$	386.2		$	380.2
Return on Average Equity		12.2	%		10.9	%		13.8	%		11.4	%		18.7	%					11.7	%		15.0	%
Operating and Acquisition Expenses
Commissions	$	1.0		$	1.3		$	1.5		$	1.0		$	1.0			0.0	%	$	2.1		$	2.0			-4.8	%
General and administrative expenses		26.8			26.9			28.1			26.6			25.9			-3.4	%		53.2			52.5			-1.3	%
Total commissions and expenses incurred		27.8			28.2			29.6			27.6			26.9			-3.2	%		55.3			54.5			-1.4	%
Less: commissions and expenses capitalized		(0.6	)		(1.5	)		(1.4	)		(0.6	)		(0.7	)		-16.7	%		(1.2	)		(1.3	)		-8.3	%
Amortization of DAC and VOBA, net of interest		13.0			15.8			13.7			11.5			13.8			6.2	%		24.0			25.3			5.4	%
Net Operating and Acquisition Expenses	$	40.2		$	42.5		$	41.9		$	38.5		$	40.0			-0.5	%	$	78.1		$	78.5			0.5	%
Roll Forward of DAC and VOBA
Balance at beginning-of-period	$	802.6		$	806.5		$	807.3		$	772.1		$	760.4					$	809.0		$	772.1
Deferrals		0.6			1.5			1.4			0.6			0.7						1.2			1.3
Amortization, net of interest:
Unlocking		(0.1	)		(0.9	)		(0.9	)		1.3			(0.3	)					0.6			1.0
Other amortization		(12.9	)		(14.9	)		(12.8	)		(12.8	)		(13.5	)					(24.6	)		(26.3	)
Deferrals, net of amortization included in operating and acquisition expenses		(12.4	)		(14.3	)		(12.3	)		(10.9	)		(13.1	)					(22.8	)		(24.0	)
Foreign currency translation adjustment		16.3			15.1			(22.9	)		(0.8	)		2.6						20.3			1.8
Balance at End-of-Period	$	806.5		$	807.3		$	772.1		$	760.4		$	749.9					$	806.5		$	749.9
Roll Forward of DFEL
Balance at beginning-of-period	$	400.4		$	402.6		$	398.2		$	379.3		$	371.5					$	404.5		$	379.3
Deferrals		0.7			0.8			0.9			0.9			0.6						1.6			1.5
Amortization, net of interest:
Unlocking		0.1			(5.3	)		(1.0	)		(0.5	)		1.2						(0.9	)		0.7
Other amortization		(6.7	)		(7.4	)		(7.5	)		(7.7	)		(7.9	)					(12.7	)		(15.6	)
Deferrals, net of amortization included in expense assessments		(5.9	)		(11.9	)		(7.6	)		(7.3	)		(6.1	)					(12.0	)		(13.4	)
Foreign currency translation adjustment		8.1			7.5			(11.3	)		(0.5	)		1.4						10.1			0.9
Balance at End-of-Period	$	402.6		$	398.2		$	379.3		$	371.5		$	366.8					$	402.6		$	366.8

6/30/2008	PAGE 27
Lincoln UK
Operational Data
Unaudited (billions of dollars)

	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Unit-Linked Assets
Balance at beginning-of-period	$	8.906		$	9.168		$	9.192		$	8.850		$	8.079			-9.3	%	$	8.757		$	8.850			1.1	%
Deposits		0.100			0.079			0.075			0.060			0.101			1.0	%		0.168			0.161			-4.2	%
Withdrawals (including charges) and deaths		(0.251	)		(0.251	)		(0.227	)		(0.213	)		(0.227	)		9.6	%		(0.491	)		(0.439	)		10.6	%
Net flows		(0.151	)		(0.172	)		(0.152	)		(0.153	)		(0.126	)		16.6	%		(0.323	)		(0.278	)		13.9	%
Investment income and change in market value		0.229			0.025			0.070			(0.608	)		(0.150	)	NM				0.506			(0.758	)	NM
Foreign currency adjustment		0.184			0.171			(0.260	)		(0.010	)		0.030			-83.7	%		0.228			0.019			-91.7	%
Balance at End-of-Period	$	9.168		$	9.192		$	8.850		$	8.079		$	7.833			-14.6	%	$	9.168		$	7.833			-14.6	%
Individual Life In Force	$	19.605		$	19.757		$	19.022		$	18.283		$	18.009			-8.1	%	$	19.605		$	18.009			-8.1	%
Exchange Rate - Dollars to Pounds
For-the-period		1.989			2.025			2.051			1.987			1.986			-0.2	%		1.977			1.987			0.5	%
End-of-period		2.008			2.046			1.987			1.985			1.992			-0.8	%		2.008			1.992			-0.8	%

6/30/2008	PAGE 28
Other Operations (1)
Unaudited (in millions)

	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Operating Revenues
Insurance premiums	$	(1.2	)	$	1.3		$	0.7		$	1.4		$	1.6			233.3	%	$	1.5		$	3.0			100.0	%
Net investment income		91.4			92.6			101.3			98.6			87.1			-4.7	%		178.6			185.7			4.0	%
Amortization of deferred gain on business sold through reinsurance (2)		18.6			18.6			18.6			18.5			18.4			-1.1	%		37.2			36.9			-0.8	%
Other revenues and fees		5.6			(3.6	)		1.2			(2.3	)		0.6			-89.3	%		5.4			(1.7	)	NM
Communications revenues		28.8			26.6			26.5			21.7			22.9			-20.5	%		53.7			44.6			-16.9	%
Inter-segment elimination of investment advisory fees		(19.6	)		(22.6	)		(20.3	)		(20.0	)		(20.6	)		-5.1	%		(44.1	)		(40.6	)		7.9	%
Total Operating Revenues		123.6			112.9			128.0			117.9			110.0			-11.0	%		232.3			227.9			-1.9	%
Operating Expenses
Benefits		38.2			35.6			36.4			27.8			28.9			-24.3	%		74.2			56.9			-23.3	%
Interest credited to contract holder funds		44.5			48.4			47.8			45.8			41.8			-6.1	%		88.1			87.6			-0.6	%
Operating and acquisition expenses		38.5			48.2			55.2			34.9			46.7			21.3	%		60.0			81.6			36.0	%
Taxes, licenses and fees		0.5			3.9			5.1			2.1			1.1			120.0	%		3.9			3.2			-17.9	%
Interest and debt expenses		73.1			68.2			80.3			75.4			64.8			-11.4	%		135.5			140.2			3.5	%
Communications expenses		15.2			13.2			13.5			15.5			15.4			1.3	%		29.8			30.9			3.7	%
Inter-segment elimination of investment advisory fees		(19.6	)		(22.6	)		(20.3	)		(20.0	)		(20.6	)		-5.1	%		(44.1	)		(40.6	)		7.9	%
Total Operating Expenses		190.4			194.9			218.0			181.5			178.1			-6.5	%		347.4			359.8			3.6	%
Loss from operations before federal income taxes		(66.8	)		(82.0	)		(90.0	)		(63.6	)		(68.1	)		-1.9	%		(115.1	)		(131.9	)		-14.6	%
Federal income taxes		(30.6	)		(32.4	)		(30.6	)		(21.3	)		(23.7	)		22.5	%		(51.0	)		(45.3	)		11.2	%
Loss From Operations	$	(36.2	)	$	(49.6	)	$	(59.4	)	$	(42.3	)	$	(44.4	)		-22.7	%	$	(64.1	)	$	(86.6	)		-35.1	%
Run Off Institutional Pensions Account Values - Balance at End-of-Period	$	2.729		$	2.720		$	2.094		$	2.074		$	2.051			-24.8	%	$	2.729		$	2.051			-24.8	%
Discontinued Operations
Unaudited (in millions)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Discontinued Operations Before Disposal
Income from discontinued operations before federal income taxes	$	9.7		$	10.2		$	13.9		$	7.4		$	-			-100.0	%	$	21.5		$	7.4			-65.6	%
Federal income taxes		3.4			3.6			4.8			2.6			-			-100.0	%		7.6			2.6			-65.8	%
Income From Discontinued Operations Before Disposal		6.3			6.6			9.1			4.8			-			-100.0	%		13.9			4.8			-65.5	%
Disposal
Gain (loss) on disposal before federal income taxes		-			-			57.1			(12.3	)		(0.4	)	NM				-			(12.7	)	NM
Federal income taxes		-			-			193.0			(3.3	)		(0.1	)	NM				-			(3.4	)	NM
Loss on Disposal		-			-			(135.9	)		(9.0	)		(0.3	)	NM				-			(9.3	)	NM
Income (Loss) From Discontinued Operations	$	6.3		$	6.6		$	(126.8	)	$	(4.2	)	$	(0.3	)	NM			$	13.9		$	(4.5	)	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.

6/30/2008	PAGE 29
Consolidated Domestic Deposits/Account Balances
Unaudited (in billions)

	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Deposits -  For the Period
Individual Markets - fixed annuities (1)	$	0.982		$	1.231		$	1.288		$	1.160		$	1.371			39.6	%	$	1.803		$	2.531			40.4	%
Individual Markets - variable annuities		2.295			2.247			2.594			1.866			2.065			-10.0	%		4.295			3.931			-8.5	%
Individual Markets - Life Insurance		1.005			0.980			1.086			0.967			0.952			-5.3	%		2.044			1.919			-6.1	%
Employer Markets - fixed annuities		0.233			0.305			0.267			0.332			0.280			20.2	%		0.531			0.612			15.3	%
Employer Markets - variable products (2)		1.040			1.220			0.997			1.219			1.141			9.7	%		2.229			2.360			5.9	%
Employer Markets - Executive Benefits		0.079			0.052			0.107			0.165			0.110			39.2	%		0.144			0.275			91.0	%
Investment Management - annuities		0.903			0.891			0.953			1.562			0.786			-13.0	%		2.203			2.348			6.6	%
Investment Management - mutual funds		1.897			1.543			2.241			1.592			1.407			-25.8	%		3.649			2.999			-17.8	%
Investment Management - managed account and other		0.475			0.377			0.398			0.341			0.403			-15.2	%		1.025			0.744			-27.4	%
Consolidating adjustments		(0.890	)		(0.878	)		(0.926	)		(1.494	)		(0.776	)		12.8	%		(1.689	)		(2.270	)		-34.4	%
Total Gross Retail Deposits		8.019			7.968			9.005			7.710			7.739			-3.5	%		16.234			15.449			-4.8	%
Investment Management - institutional		2.876			2.936			2.230			1.228			0.910			-68.4	%		5.307			2.140			-59.7	%
Consolidating adjustments		(0.188	)		(0.030	)		(0.192	)		(0.092	)		(0.034	)		81.9	%		(0.299	)		(0.126	)		57.9	%
Total Gross Deposits	$	10.707		$	10.874		$	11.043		$	8.846		$	8.615			-19.5	%	$	21.242		$	17.463			-17.8	%
Account Balances - End of Period
Individual Markets - fixed annuities (1)	$	16.269		$	16.383		$	16.470		$	16.395		$	16.544			1.7	%	$	16.269		$	16.544			1.7	%
Individual Markets - variable annuities		55.171			58.293			58.643			54.966			55.854			1.2	%		55.171			55.854			1.2	%
Individual Markets - Life Insurance		27.465			27.875			28.122			27.881			28.077			2.2	%		27.465			28.077			2.2	%
Employer Markets - fixed annuities		10.940			10.891			10.889			11.217			11.294			3.2	%		10.940			11.294			3.2	%
Employer Markets - variable products (2)		25.023			25.746			25.169			23.547			23.748			-5.1	%		25.023			23.748			-5.1	%
Employer Markets - Executive Benefits		4.353			4.391			4.436			4.460			4.526			4.0	%		4.353			4.526			4.0	%
Investment Management - annuities		12.780			12.814			12.282			11.697			11.700			-8.5	%		12.780			11.700			-8.5	%
Investment Management - mutual funds		19.894			20.274			19.793			18.690			18.176			-8.6	%		19.894			18.176			-8.6	%
Investment Management - managed account and other		18.215			18.092			17.638			15.244			14.292			-21.5	%		18.215			14.292			-21.5	%
Consolidating adjustments		(12.240	)		(12.300	)		(11.798	)		(11.264	)		(11.286	)		7.8	%		(12.240	)		(11.286	)		7.8	%
Total Retail Account Balances		177.870			182.459			181.644			172.833			172.925			-2.8	%		177.870			172.925			-2.8	%
Investment Management - institutional		46.836			48.536			35.644			32.907			31.523			-32.7	%		46.836			31.523			-32.7	%
Consolidating adjustments		(2.604	)		(2.529	)		(2.357	)		(2.208	)		(2.124	)		18.4	%		(2.604	)		(2.124	)		18.4	%
Total Account Balances	$	222.102		$	228.466		$	214.931		$	203.532		$	202.324			-8.9	%	$	222.102		$	202.324			-8.9	%
Total Domestic Net Flows
Unaudited (in billions)
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Retail Net Flows
Individual Markets - Life Insurance	$	0.585		$	0.635		$	0.745		$	0.580		$	0.627			7.2	%	$	1.283		$	1.207			-5.9	%
Individual Markets - Annuities		1.137			1.291			1.809			1.181			1.589			39.8	%		1.892			2.770			46.4	%
Employer Markets - Defined Contribution		0.073			0.133			(0.091	)		0.280			0.237			224.7	%		0.294			0.517			75.9	%
Employer Markets - Executive Benefits		0.026			(0.005	)		0.037			0.071			0.050			92.3	%		(0.049	)		0.121		NM
Investment Management - retail		(0.275	)		(0.335	)		(0.649	)		(0.655	)		(0.937	)	NM				(0.042	)		(1.592	)	NM
Consolidating adjustments		0.330			0.071			0.140			(0.098	)		(0.075	)	NM				0.326			(0.173	)	NM
Total Retail Net Flows		1.876			1.790			1.991			1.359			1.491			-20.5	%		3.704			2.850			-23.1	%
Investment Management - institutional		(0.148	)		0.426			(0.302	)		(0.510	)		(0.535	)	NM				(0.470	)		(1.045	)	NM
Consolidating adjustments		(0.026	)		0.128			0.132			0.030			0.052			300.0	%		0.022			0.082			272.7	%
Total Net Flows	$	1.702		$	2.344		$	1.821		$	0.879		$	1.008			-40.8	%	$	3.256		$	1.887			-42.0	%

(1)  Includes fixed portion of variable annuities.

(2)  Includes amounts attributable to mutual fund net flows.  Mutual fund account values are not included in the separate accounts reported

     on our Consolidated Balance Sheets.

6/30/2008	PAGE 30
Consolidated Investment Data - Assets Managed
Unaudited (in billions)

	As of
	June		Sept.		Dec.		March			June		%
	2007		2007		2007		2008			2008		Change
Assets Managed by Source
LNC's investments and cash:									��
Available-for-sale fixed maturity securities	$	55.447	$	56.086	$	56.276	$	55.624		$	54.518		-1.7	%
Available-for-sale equity securities		0.687		0.670		0.518		0.474			0.465		-32.3	%
Trading securities		2.818		2.717		2.730		2.714			2.551		-9.5	%
Other investments		11.880		12.040		12.398		12.743			12.669		6.6	%
Total LNC investments		70.833		71.513		71.922		71.555			70.201		-0.9	%
Separate accounts		89.497		92.903		91.113		84.703			85.295		-4.7	%
Cash and invested cash		0.989		1.328		1.666		2.447			1.921		94.2	%
Total LNC		161.319		165.744		164.700		158.705			157.418		-2.4	%
Non-affiliate assets managed		83.709		85.684		71.975		66.020			63.197		-24.5	%
Total Assets Managed	$	245.028	$	251.428	$	236.675	$	224.725		$	220.615		-10.0	%
		-
Assets Managed by Advisor
Investment Management segment (1)	$	97.725	$	99.716	$	85.357	$	78.538		$	75.691		-22.5	%
DLIA-Corp (2)		66.423		67.324		67.417		67.339			65.997		-0.6	%
Lincoln UK		10.536		10.589		10.247		9.445			9.180		-12.9	%
Domestic policy loans (excluding Lincoln UK)		2.783		2.786		2.831		2.801			2.799		0.6	%
Non-LNC affiliates		67.561		71.013		70.823		66.602			66.948		-0.9	%
Total Assets Managed	$	245.028	$	251.428	$	236.675	$	224.725		$	220.615		-10.0	%
(1) See page 25 for additional detail.
(2) Represents assets managed internally. See page 25 for additional detail.

6/30/2008	PAGE 31
Consolidated Investment Data - Other Investment Data
Unaudited (millions of dollars)

	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Net Investment Income
Available-for-sale fixed maturity securities	$	845.4		$	854.0		$	868.0		$	858.2		$	855.3			1.2	%	$	1,689.5		$	1,713.5			1.4	%
Available-for-sale equity securities		11.8			10.4			10.4			9.1			7.8			-33.9	%		20.4			16.9			-17.2	%
Trading securities		44.4			44.0			42.4			42.5			42.2			-5.0	%		89.9			84.7			-5.8	%
Mortgage loans on real estate		131.8			123.0			122.0			121.6			128.6			-2.4	%		262.4			250.2			-4.6	%
Real estate		12.5			15.5			13.3			8.0			6.4			-48.8	%		27.7			14.4			-48.0	%
Policy loans		44.3			43.0			44.6			44.6			43.2			-2.5	%		86.9			87.8			1.0	%
Invested cash		16.7			16.2			20.9			18.8			15.3			-8.4	%		35.7			34.1			-4.5	%
Other investments		72.8			4.3			17.3			(3.0	)		9.3			-87.2	%		101.7			6.3			-93.8	%
Investment income		1,179.7			1,110.4			1,138.9			1,099.8			1,108.1			-6.1	%		2,314.2			2,207.9			-4.6	%
Investment expense		(46.5	)		(48.8	)		(45.2	)		(34.4	)		(31.3	)		32.7	%		(91.2	)		(65.7	)		28.0	%
Net Investment Income	$	1,133.2		$	1,061.6		$	1,093.7		$	1,065.4		$	1,076.8			-5.0	%	$	2,223.0		$	2,142.2			-3.6	%
Average Invested Assets (Amortized Cost)	$	70,273.1		$	70,569.0		$	70,734.4		$	70,941.2		$	71,267.4					$	70,149.9		$	71,104.3
Ratio of Net Investment Income Average Mean Invested Assets		6.45	%		6.02	%		6.18	%		6.01	%		6.04	%					6.34	%		6.03	%
	For the Three Months Ended																		For the Six Months Ended
	June			Sept.			Dec.			March			June			%			June			June			%
	2007			2007			2007			2008			2008			Change			2007			2008			Change
Realized Gain (Loss) Related to Investments
Available-for-sale fixed maturity securities
Gross gains	$	26.5		$	26.4		$	16.7		$	9.1		$	21.7			-18.1	%	$	81.4		$	30.8			-62.2	%
Gross losses		(46.3	)		(44.2	)		(87.7	)		(100.0	)		(137.8	)	NM				(53.1	)		(237.8	)	NM
Equity securities
Gross gains		4.0			1.2			0.3			2.7			0.3			-92.5	%		6.2			3.0			-51.6	%
Gross losses		(0.4	)		-			(110.9	)		-			(7.0	)	NM				(0.4	)		(7.0	)	NM
Gain on other investments		5.3			5.9			11.5			25.1			3.1			-41.5	%		1.1			28.2		NM
Associated amortization of DAC, VOBA, DSI, DFEL and changes in other contract holder funds		(1.7	)		(14.3	)		65.2			25.1			24.2		NM				(21.6	)		49.3		NM
Total realized gain (loss) on investments, excluding trading securities		(12.6	)		(25.0	)		(104.9	)		(38.0	)		(95.5	)	NM				13.6			(133.5	)	NM
Gain (loss) on certain derivative instruments		4.0			(10.9	)		(4.1	)		(3.1	)		(29.1	)	NM				4.2			(32.2	)	NM
Associated amortization of DAC, VOBA, DSI, DFEL and changes in other contract holder funds		(0.1	)		0.5			0.2			-			-			100.0	%		-			-		NM
Total, pre-tax		(8.7	)		(35.4	)		(108.8	)		(41.1	)		(124.6	)	NM				17.8			(165.7	)	NM
Income taxes		(3.8	)		(12.2	)		(37.4	)		(14.0	)		(44.0	)	NM				5.5			(58.0	)	NM
Total, After-Tax	$	(4.9	)	$	(23.2	)	$	(71.4	)	$	(27.1	)	$	(80.6	)	NM			$	12.3		$	(107.7	)	NM
				As of June 30, 2008									As of December 31, 2007
				Amount			% of Total						Amount			% of Total
Available-for-Sale and Trading Securities
Fixed maturity securities (fair value)				$	57,065.9			99.2	%				$	59,003.8			99.1	%
Fixed maturity securities (amortized cost)					58,973.9			99.0	%					58,578.9			99.1	%
Equity securities (fair value)					466.8			0.8	%					520.0			0.9	%
Equity securities (amortized cost)					619.0			1.0	%					549.9			0.9	%
% of Available-for-Sale Fixed Maturity Securities (Based on Fair Value)
Treasuries and AAA								23.3	%								23.1	%
AA or better								32.2	%								32.9	%
BB or less								5.2	%								5.1	%
General Account Investments				As of June 30, 2008									As of December 31, 2007
				Amount			% of Total						Amount			% of Total
Fixed Maturities - Security Sector:
Corporate bonds				$	42,618.0			78.1	%				$	44,147.9			78.5	%
U.S. Government bonds					203.9			0.4	%					222.0			0.4	%
Foreign government bonds					907.5			1.7	%					1,037.5			1.8	%
Mortgage-backed securities					10,547.7			19.3	%					10,604.6			18.8	%
State and municipal bonds					141.7			0.3	%					153.1			0.3	%
Preferred stocks - redeemable					98.8			0.2	%					110.7			0.2	%
Total				$	54,517.6			100.0	%				$	56,275.8			100.0	%
	As of
	June			Sept.			Dec.			March			June			%
Composition of Investment Portfolio	2007			2007			2007			2008			2008			Change
Available-for-sale securities, at fair value:
Fixed maturity	$	55,446.9		$	56,086.2		$	56,275.8		$	55,624.0		$	54,517.6			-1.7	%
Equity		686.9			670.2			517.9			474.4			464.6			-32.4	%
Trading securities		2,818.3			2,716.6			2,730.2			2,713.6			2,550.5			-9.5	%
Mortgage loans on real estate and real estate		7,698.4			7,665.7			7,681.0			7,707.2			7,813.6			1.5	%
Policy loans		2,787.0			2,790.2			2,834.7			2,804.0			2,801.8			0.5	%
Derivative investments		375.9			554.1			807.1			1,091.1			889.9			136.7	%
Other investments		1,019.1			1,029.9			1,074.9			1,141.0			1,163.4			14.2	%
Total	$	70,832.5		$	71,512.9		$	71,921.6		$	71,555.3		$	70,201.4			-0.9	%