FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-8090
LINCOLN NATIONAL VARIABLE ANNUITY FUND A
(Exact name of registrant as specified in charter)
1300 South Clinton Street
Fort Wayne, Indiana 46802
(Address of principal executive offices) (Zip code)
Dennis L. Schoff, Esq.
The Lincoln National Life Insurance Company
1300 South Clinton Street
Post Office Box 1110
Fort Wayne, Indiana 46801
(Name and address of agent for service)
Copies of all communications to:
Jeffrey S. Puretz, Esq.
Dechert LLP
1775 Eye Street, N.W.
Washington, D.C. 20006
Colleen E. Tonn, Esq.
The Lincoln National Life Insurance Company
1300 South Clinton Street
Post Office Box 1110
Fort Wayne, Indiana 46801
Registrant's telephone number, including area code: (260) 455-3404
Date of fiscal year end: December 31
Date of reporting period: January 1, 2004 through June 30, 2004
Item 1. Reports to Stockholders
Lincoln National Variable Annuity Fund A
VARIABLE ANNUITY FUND A
(DELAWARE INVESTMENTS LOGO)
Lincoln National
Variable Annuity Fund A
Semiannual Report
June 30, 2004
LINCOLN NATIONAL VARIABLE ANNUITY FUND A
INDEX
<Table>
STATEMENT OF NET ASSETS
STATEMENT OF OPERATIONS
STATEMENTS OF CHANGES IN NET ASSETS
NOTES TO FINANCIAL STATEMENTS
</Table>
LINCOLN NATIONAL VARIABLE ANNUITY FUND A
STATEMENT OF NET ASSETS
June 30, 2004 (Unaudited)
<Table>
<Caption>
NUMBER OF FAIR
SHARES VALUE
COMMON STOCK-99.58%
AEROSPACE & DEFENSE-1.83%
Goodrich................................... 8,300 $ 268,339
Honeywell International.................... 5,000 183,150
Northrop Grumman........................... 4,800 257,760
Textron.................................... 3,500 207,725
United Technologies........................ 5,500 503,140
-----------
1,420,114
-----------
AUTOMOBILES & AUTOMOTIVE PARTS-1.42%
General Motors............................. 7,700 358,743
Johnson Controls........................... 6,900 368,322
PACCAR..................................... 6,500 376,935
-----------
1,104,000
-----------
BANKING & FINANCE-15.98%
American Express........................... 5,200 267,176
Bank of America............................ 19,997 1,692,146
Bank One................................... 4,700 239,700
Capital One Financial...................... 2,800 191,464
CIT Group.................................. 10,600 405,874
Citigroup.................................. 44,300 2,059,949
Countrywide Financial...................... 5,899 414,405
First Horizon National..................... 5,400 245,538
Freddie Mac................................ 12,800 810,240
Goldman Sachs.............................. 4,800 451,968
J.P. Morgan Chase.......................... 18,940 734,304
Lehman Brothers Holdings................... 4,800 361,200
MBNA....................................... 14,900 384,271
Mellon Financial........................... 13,300 390,089
Merrill Lynch.............................. 10,400 561,392
Morgan Stanley............................. 12,100 638,517
PNC Financial Group........................ 3,800 201,704
U.S. Bancorp............................... 21,863 602,544
Wachovia................................... 9,500 422,750
Washington Mutual.......................... 12,800 494,592
Wells Fargo................................ 10,700 612,361
Zions Bancorporation....................... 4,100 251,945
-----------
12,434,129
-----------
BUILDINGS & MATERIALS-1.04%
KB HOME.................................... 5,800 398,054
Masco...................................... 13,300 414,694
-----------
812,748
-----------
BUSINESS SERVICES-0.49%
Cendant.................................... 15,700 384,336
-----------
384,336
-----------
CABLE, MEDIA & PUBLISHING-4.74%
Clear Channel Communications............... 10,100 373,195
+ Comcast Class A............................ 10,700 299,921
+ Comcast Special Class A.................... 26,800 739,948
+ DIRECTV Group.............................. 13,234 226,301
Disney (Walt).............................. 22,500 573,525
+ InterActiveCorp............................ 12,900 388,806
</Table>
<Table>
<Caption>
NUMBER OF FAIR
SHARES VALUE
COMMON STOCK (CONTINUED)
CABLE, MEDIA & PUBLISHING (CONTINUED)
Knight-Ridder.............................. 3,000 $ 216,000
Viacom Class B............................. 24,400 871,568
-----------
3,689,264
-----------
CHEMICALS-1.28%
Dow Chemical............................... 9,600 390,720
duPont (E.I.) deNemours.................... 5,200 230,984
Lubrizol................................... 5,500 201,410
PPG Industries............................. 2,700 168,723
-----------
991,837
-----------
COMPUTERS & TECHNOLOGY-9.66%
Adobe Systems.............................. 10,800 502,200
+ Dell....................................... 26,000 931,320
Deluxe..................................... 5,200 226,200
+ DST Systems................................ 4,300 206,787
+ Electronic Arts............................ 6,800 370,940
+ EMC........................................ 33,800 385,320
Factset Research Systems................... 2,400 113,448
Hewlett-Packard............................ 19,597 413,497
International Business Machines............ 8,900 784,535
+ Intuit..................................... 8,400 324,072
+ Juniper Networks........................... 10,900 267,813
Microsoft.................................. 70,900 2,024,904
+ Oracle..................................... 44,000 524,920
+ SanDisk.................................... 11,000 238,590
+ Storage Technology......................... 6,800 197,200
-----------
7,511,746
-----------
CONSUMER PRODUCTS-3.21%
3M......................................... 5,000 450,050
Clorox..................................... 3,400 182,852
Fortune Brands............................. 3,900 294,177
Gillette................................... 9,400 398,560
Kimberly-Clark............................. 5,400 355,752
Procter & Gamble........................... 15,000 816,600
-----------
2,497,991
-----------
CONSUMER SERVICES-0.15%
+ Apollo Group Class A....................... 1,300 114,777
-----------
114,777
-----------
ELECTRONICS & ELECTRICAL EQUIPMENT-7.77%
+ Altera..................................... 12,400 275,528
+ Applied Materials.......................... 14,400 282,528
+ Energizer Holdings......................... 4,500 202,500
General Electric........................... 73,600 2,384,640
Intel...................................... 68,300 1,885,080
Linear Technology.......................... 7,100 280,237
+ Sanmina.................................... 21,800 198,380
Texas Instruments.......................... 22,040 532,927
-----------
6,041,820
-----------
</Table>
Variable Annuity Fund A- 1
LINCOLN NATIONAL VARIABLE ANNUITY FUND A
STATEMENT OF NET ASSETS (CONTINUED)
<Table>
<Caption>
NUMBER OF FAIR
SHARES VALUE
COMMON STOCK (CONTINUED)
ENERGY-6.27%
ChevronTexaco.............................. 9,799 $ 922,184
ConocoPhillips............................. 5,300 404,337
Devon Energy............................... 6,200 409,200
Exxon Mobil................................ 53,000 2,353,730
+ National-Oilwell........................... 7,700 242,473
+ Noble...................................... 7,900 299,331
Occidental Petroleum....................... 5,100 246,891
-----------
4,878,146
-----------
ENVIRONMENTAL SERVICES-0.51%
Waste Management........................... 12,900 395,385
-----------
395,385
-----------
FOOD, BEVERAGE & TOBACCO-4.36%
Altria Group............................... 17,600 880,880
Anheuser-Busch............................. 12,600 680,400
Coca-Cola.................................. 13,100 661,288
Kellogg.................................... 6,200 259,470
Kraft Foods Class A........................ 8,800 278,784
PepsiCo.................................... 8,000 431,040
Sysco...................................... 5,600 200,872
-----------
3,392,734
-----------
HEALTHCARE & PHARMACEUTICALS-15.02%
Abbott Laboratories........................ 11,600 472,816
+ American Pharmaceutical Partners........... 1,800 54,684
+ Amgen...................................... 14,100 769,437
+ Anthem..................................... 2,500 223,900
Beckman Coulter............................ 5,900 359,900
Becton, Dickinson.......................... 4,700 243,460
Biomet..................................... 7,600 337,744
Bristol-Myers Squibb....................... 22,900 561,050
+ Express Scripts Class A.................... 4,500 356,535
+ Genentech.................................. 6,500 365,300
+ Gilead Sciences............................ 5,100 341,700
GlaxoSmithKline ADR........................ 4,800 199,008
Guidant.................................... 6,700 374,396
Johnson & Johnson.......................... 26,700 1,487,190
+ MedImmune.................................. 10,500 245,700
Medtronic.................................. 7,900 384,888
Merck...................................... 19,200 912,000
Mylan Laboratories......................... 11,300 228,825
Pfizer..................................... 56,120 1,923,794
+ Tenet Healthcare........................... 32,100 430,461
UnitedHealth Group......................... 7,700 479,325
+ WellPoint Health Networks.................. 2,500 280,025
Wyeth...................................... 18,200 658,112
-----------
11,690,250
-----------
INDUSTRIAL MACHINERY-1.56%
Black & Decker............................. 3,300 205,029
Caterpillar................................ 4,300 341,592
Cummins Engine............................. 4,000 250,000
+ Lam Research............................... 6,200 166,160
Rockwell Automation........................ 6,600 247,566
-----------
1,210,347
-----------
</Table>
<Table>
<Caption>
NUMBER OF FAIR
SHARES VALUE
COMMON STOCK (CONTINUED)
INSURANCE-3.68%
Allstate................................... 7,600 $ 353,780
American International..................... 13,000 926,640
Berkley (W.R.)............................. 7,400 317,830
Everest Re Group........................... 3,300 265,188
MetLife.................................... 9,600 344,160
Nationwide Financial Services Class A...... 7,000 263,270
Prudential Financial....................... 8,400 390,348
-----------
2,861,216
-----------
LEISURE, LODGING & ENTERTAINMENT-3.40%
Harley-Davidson............................ 3,400 210,596
Marriott International Class A............. 6,900 344,172
McDonald's................................. 17,100 444,600
+ MGM MIRAGE................................. 5,200 244,088
+ Time Warner................................ 61,150 1,075,017
+ Yum Brands................................. 8,700 323,814
-----------
2,642,287
-----------
METALS & MINING-0.58%
Alcoa...................................... 9,500 313,785
Freeport-McMoRan Copper & Gold Class B..... 4,200 139,230
-----------
453,015
-----------
MISCELLANEOUS-0.27%
Tyco International......................... 6,300 208,782
-----------
208,782
-----------
MULTIFAMILY REITS-0.31%
Apartment Investment & Management.......... 7,700 239,701
-----------
239,701
-----------
OFFICE/INDUSTRIAL REITS-0.67%
Equity Office Properties Trust............. 11,500 312,800
Mills...................................... 4,400 205,480
-----------
518,280
-----------
PAPER & FOREST PRODUCTS-0.93%
International Paper........................ 8,100 362,070
Weyerhaeuser............................... 5,700 359,784
-----------
721,854
-----------
RETAIL-4.90%
Best Buy................................... 3,300 167,442
CVS........................................ 7,400 310,948
Dollar General............................. 7,400 144,744
+ eBay....................................... 2,400 220,680
Federated Department Stores................ 4,900 240,590
Gap........................................ 17,600 426,800
Home Depot................................. 26,600 936,320
Limited Brands............................. 11,500 215,050
RadioShack................................. 7,500 214,725
</Table>
Variable Annuity Fund A- 2
LINCOLN NATIONAL VARIABLE ANNUITY FUND A
STATEMENT OF NET ASSETS (CONTINUED)
<Table>
<Caption>
NUMBER OF FAIR
SHARES VALUE
COMMON STOCK (CONTINUED)
RETAIL (CONTINUED)
Saks....................................... 14,300 $ 214,500
Wal-Mart Stores............................ 13,600 717,536
-----------
3,809,335
-----------
TELECOMMUNICATIONS-5.35%
CenturyTel................................. 5,800 174,232
+ Cisco Systems.............................. 63,900 1,514,430
+ Level 3 Communications..................... 35,500 126,025
Motorola................................... 13,600 248,200
+ NEXTEL Communications Class A.............. 17,500 466,550
Nokia ADR.................................. 14,700 213,738
QUALCOMM................................... 3,000 218,940
SBC Communications......................... 22,363 542,303
Verizon Communications..................... 18,036 652,723
-----------
4,157,141
-----------
TEXTILES, APPAREL & FURNITURE-0.93%
+ Coach...................................... 7,700 347,963
NIKE....................................... 5,000 378,750
-----------
726,713
-----------
TRANSPORTATION & SHIPPING-1.16%
FedEx...................................... 6,200 506,478
Union Pacific.............................. 6,600 392,370
-----------
898,848
-----------
</Table>
<Table>
<Caption>
NUMBER OF FAIR
SHARES VALUE
COMMON STOCK (CONTINUED)
UTILITIES-2.11%
Dominion Resources......................... 3,200 $ 201,856
Edison International....................... 12,800 327,296
Exelon..................................... 12,000 399,480
ONEOK...................................... 9,000 197,910
PPL........................................ 5,200 238,680
TXU........................................ 6,800 275,468
-----------
1,640,690
-----------
TOTAL COMMON STOCK
(COST $61,532,522)........................ 77,447,486
-----------
<Caption>
PRINCIPAL
AMOUNT
COMMERCIAL PAPER-0.36%
UBS Finance 1.42% 7/1/04................... $280,000 280,000
-----------
TOTAL COMMERCIAL PAPER
(COST $280,000)........................... 280,000
-----------
</Table>
<Table>
TOTAL MARKET VALUE OF SECURITIES-99.94% (COST
$61,812,522)............................................... 77,727,486
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES-0.06%....... 45,484
-----------
NET ASSETS-100.00%.......................................... $77,772,970
===========
NET ASSETS ARE REPRESENTED BY:
VALUE OF ACCUMULATION UNITS:
4,279,505 units at $16.887 unit value....................... $72,266,625
ANNUITY RESERVES:
53,542 units at $16.887 unit value.......................... 904,149
202,957 units at $22.676 unit value......................... 4,602,196
-----------
Total Net Assets............................................ $77,772,970
===========
</Table>
- ------------------
+Non-income producing security for the period ended June 30, 2004.
ADR-American Depositary Receipts
REIT-Real Estate Investment Trust
See accompanying notes
Variable Annuity Fund A- 3
LINCOLN NATIONAL VARIABLE ANNUITY
FUND A
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2004 (Unaudited)
<Table>
INVESTMENT INCOME:
Dividends.................................... $ 667,373
Interest..................................... 839
----------
668,212
----------
EXPENSES:
Investment management services............... $ 127,344
Mortality and expense guarantees............. 375,476 502,820
----------- ----------
NET INVESTMENT INCOME........................ 165,392
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain on investments............. 3,179,828
Increase in net unrealized appreciation/
depreciation of investments................. (1,687,916)
-----------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS................................. 1,491,912
----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS.................................. $1,657,304
==========
</Table>
See accompanying notes
LINCOLN NATIONAL VARIABLE ANNUITY
FUND A
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
SIX MONTHS
ENDED
6/30/04 YEAR ENDED
(UNAUDITED) 12/31/03
----------- -----------
CHANGES FROM OPERATIONS:
Net investment income....................... $ 165,392 $ 298,989
Net realized gain (loss) on investments..... 3,179,828 (512,954)
Increase (decrease) in net unrealized
appreciation/depreciation of investments... (1,687,916) 18,348,060
----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................. 1,657,304 18,134,095
Net decrease from equity transactions....... (3,591,864) (4,760,887)
----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS..... (1,934,560) 13,373,208
Net assets, at beginning of period.......... 79,707,530 66,334,322
----------- -----------
NET ASSETS, AT END OF PERIOD................ $77,772,970 $79,707,530
=========== ===========
</Table>
See accompanying notes
Variable Annuity Fund A- 4
LINCOLN NATIONAL VARIABLE ANNUITY FUND A
NOTES TO FINANCIAL STATEMENTS
June 30, 2004 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund--The Lincoln National Variable Annuity Fund A (Fund) is a segregated
investment account of The Lincoln National Life Insurance Company. The Fund is
registered under the Investment Company Act of 1940, as amended, as an open-end,
diversified management investment company. The Fund's investment objective is to
maximize long-term growth of capital. The Fund invests primarily in equity
securities diversified over industries and companies.
Investments--Equity securities, except those traded on the Nasdaq Stock Market,
Inc.(NASDAQ), are valued at the last quoted sales price as of the regular close
of the New York Stock Exchange (NYSE) on the valuation date. Securities traded
on the NASDAQ are valued in accordance with the NASDAQ Official Closing Price,
which may not be the last sales price. If on a particular day an equity security
does not trade, then the mean between the bid and asked prices will be used.
Money market instruments having less than 60 days to maturity are valued at
amortized cost, which approximates fair value. Other securities and assets for
which market quotations are not readily available are valued at fair value as
determined in good faith under the direction of the Fund's Board of Managers. In
determining whether market quotations are readily available or fair valuation
will be used, various factors will be taken into consideration, such as market
closures, or with respect to foreign securities, aftermarket trading or
significant events after local market trading (e.g. government actions or
pronouncements, trading volume or volatility on markets, exchanges among
dealers, or news events).
Federal Income Taxes--Operations of the Fund form a part of, and are taxed with,
operations of The Lincoln National Life Insurance Company, which is taxed as a
"life insurance company" under the Internal Revenue Code. Under current law, no
federal income taxes are payable with respect to the investment income and gains
on investments of the Fund. Accordingly, no provision for any such liability has
been made.
Income--Dividends are recorded as earned on the ex-dividend date and interest is
accrued as earned.
Annuity Reserves--Reserves on contracts not involving life contingencies are
calculated using assumed investment rates of 3.5%, 4.5%, 5.0%, or 6.0%. Reserves
on contracts involving life contingencies are calculated using the Progressive
Annuity Table with the age adjusted for persons born before 1900 or after 1919
and assumed investment rates of 3.5%, 4.5%, 5.0%, or 6.0%.
Use of Estimates--The preparation of financial statements in conformity with
U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of increases and decreases in
net assets from operations during the reporting period. Actual results could
differ from those estimates.
2. INVESTMENTS
The aggregate cost of investments purchased and the aggregate proceeds from
investments sold (exclusive of short-term investments) during the six months
ended June 30, 2004 amounted to $22,314,946 and $25,019,584, respectively.
3. EXPENSES/SALES CHARGES AND OTHER TRANSACTIONS WITH AFFILIATES
The Lincoln National Life Insurance Company (Lincoln Life) is responsible for
overall management of the Fund's investment portfolio and provides certain
administrative services to the Fund. Lincoln Life is a direct wholly-owned
subsidiary of Lincoln National Corporation (LNC). For its services, Lincoln Life
receives an investment management services fee at the rate of 0.000885% of the
current value of the Fund per day (0.323% on an annual basis) and for mortality
and expense guarantees at the rate of 0.002745% of the current value of the Fund
per day (1.002% on an annual basis). Lincoln Life retained $2,063 from the
proceeds of the sale of annuity contracts during the six months ended June 30,
2004 for sales and administrative charges. Accordingly, Lincoln Life is
responsible for all sales, general, and administrative expenses applicable to
the Fund.
Delaware Management Company (the "Sub-Adviser") is responsible for the
day-to-day management of the Fund's investment portfolio. The Sub-Adviser is a
series of Delaware Management Business Trust (DMBT), a multi-series business
trust registered with the Securities and Exchange Commission as an investment
adviser. DMBT is an indirect wholly-owned subsidiary of LNC. For its services,
the Sub-Adviser is paid directly by Lincoln Life, not the Fund.
The custodian bank of the Fund has agreed to waive its custodial fees when the
Fund maintains a prescribed amount of cash on deposit in certain non-interest
bearing accounts. For the six months ended June 30, 2004, the custodial fee
offset arrangement was not material to either expenses or to the calculation of
average net assets and the ratio of expenses to average net assets.
4. NET ASSETS
Net assets at June 30, 2004 consisted of the following:
<Table>
Equity transactions..................................... $(223,406,497)
Accumulated net investment income....................... 75,011,656
Accumulated net realized gain on investments............ 210,252,846
Net unrealized appreciation of investments.............. 15,914,965
-------------
Net Assets.............................................. $ 77,772,970
=============
</Table>
Variable Annuity Fund A- 5
LINCOLN NATIONAL VARIABLE ANNUITY FUND A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. SUMMARY OF CHANGES IN EQUITY TRANSACTIONS
<Table>
<Caption>
SIX MONTHS ENDED 6/30/04
(UNAUDITED) YEAR ENDED DECEMBER 31, 2003
UNITS AMOUNT UNITS AMOUNT
--------- ------------- --------- -------------
Accumulation Units:
Balance at beginning of period.............. 4,466,321 $(205,165,202) 4,747,195 $(201,232,797)
Contract purchases.......................... 29,026 483,200 49,763 755,516
Terminated contracts........................ (215,842) (3,634,993) (330,637) (4,687,921)
--------- ------------- --------- -------------
Balance at end of period..................... 4,279,505 $(208,316,995) 4,466,321 $(205,165,202)
========= ============= ========= =============
Annuity Reserves:
Balance at beginning of period.............. 277,592 $ (14,649,431) 328,690 $ (13,820,949)
Annuity payments............................ (21,093) (440,071) (51,098) (828,482)
Receipt of guarantee mortality
adjustments................................. -- -- -- --
--------- ------------- --------- -------------
Balance at end of period..................... 256,499 $ (15,089,502) 277,592 $ (14,649,431)
========= ============= ========= =============
</Table>
6. SUPPLEMENTAL INFORMATION-SELECTED PER UNIT DATA AND RATIOS
The following is selected financial data for an accumulation unit outstanding
throughout each period:
<Table>
<Caption>
SIX MONTHS
ENDED
6/30/04 YEAR ENDED DECEMBER 31,
(UNAUDITED) 2003 2002
----------- ------- -------
Investment income............................ $ 0.144 $ 0.245 $ 0.253
Expenses..................................... (0.108) (0.184) (0.191)
------- ------- -------
Net investment income (loss)................. 0.036 0.061 0.062
Net realized and unrealized gain (loss) on
investments................................. 0.306 3.612 (4.238)
------- ------- -------
Increase (decrease) in accumulation unit
value....................................... 0.342 3.673 (4.176)
Accumulation unit value at beginning of
period...................................... 16.545 12.872 17.048
------- ------- -------
Accumulation unit value at end of period..... $16.887 $16.545 $12.872
======= ======= =======
Ratio of expenses to average net assets...... 1.28% 1.27% 1.28%
Ratio of net investment income (loss) to
average net assets.......................... 0.42% 0.42% 0.41%
Total investment return...................... 2.05% 28.54% (24.50%)
Portfolio turnover rate...................... 56.98% 77.30% 60.26%
Number of accumulation units outstanding at
end of period (expressed in thousands)
Accumulation units:......................... 4,280 4,466 4,747
Reserve units:.............................. 256 278 329
<Caption>
YEAR ENDED DECEMBER 31,
2001 2000 1999
------- ------- -------
Investment income............................ $ 0.249 $ 0.265 $ 0.283
Expenses..................................... (0.228) (0.275) (0.256)
------- ------- -------
Net investment income (loss)................. 0.021 (0.010) 0.027
Net realized and unrealized gain (loss) on
investments................................. (2.354) (2.454) 3.106
------- ------- -------
Increase (decrease) in accumulation unit
value....................................... (2.333) (2.464) 3.133
Accumulation unit value at beginning of
period...................................... 19.381 21.845 18.712
------- ------- -------
Accumulation unit value at end of period..... $17.048 $19.381 $21.845
======= ======= =======
Ratio of expenses to average net assets...... 1.28% 1.28% 1.28%
Ratio of net investment income (loss) to
average net assets.......................... 0.12% (0.05%) 0.14%
Total investment return...................... (12.04%) (11.28%) 16.74%
Portfolio turnover rate...................... 78.03% 66.67% 21.46%
Number of accumulation units outstanding at
end of period (expressed in thousands)
Accumulation units:......................... 5,305 5,787 6,366
Reserve units:.............................. 373 426 472
</Table>
For a free copy of each fund's proxy voting guidelines and information regarding
how a fund voted proxies relating to portfolio securities during the most recent
12-month period ended June 30, 2004, please call 1-800-4LINCOLN (454-6265) or
visit the Securities and Exchange Commission's website at www.sec.gov.
Variable Annuity Fund A- 6
Item 2. Code of Ethics
Not Applicable.
Item 3. Audit Committee Financial Expert
Not Applicable.
Item 4. Principle Accountant Fees and Services
(a) Audit Fees
Not Applicable.
(b) Audit-Related Fees
Not Applicable.
(c) Tax Fees
Not Applicable.
(d) All Other Fees
Not Applicable.
(e) (1) Audit Committee Pre-Approval Policies and Procedures
Not Applicable.
(e)(2) Not Applicable.
(f) Not Applicable.
(g) Aggregate Non-Audit Fees
Not Applicable.
(h) Principal Accountant's Independence
Not Applicable.
Item 5. Audit Committee of Listed Registrants
Not Applicable.
Item 6. Schedule of Investments
Included as part of the report to shareholders filed under Item 1 of this Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies
Not Applicable.
Item 8. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers
Not Applicable.
Item 9. Submission of Matters to a Vote of Security Holders
The Nominating Committee of the Registrant at the May 17, 2004 Board Meeting,
determined that it would consider any Manager nominations from shareholders of
the Registrant. The Nominating Committee instructed management of the Registrant
to provide them with any Manager nominations that they receive from shareholders
of the Registrant.
Item 10. Controls and Procedures
(a) The Registrant's president and chief accounting officer have concluded
that the Registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940) provide reasonable assurances
that material information relating to the Registrant is made known to them by
the appropriate persons, based on their evaluation of these controls and
procedures as of a date within 90 days of the filing date of this report.
(b) There were no changes in the Registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Investment Company
Act of 1940) that occurred during the Registrant's last fiscal half-year that
has materially affected, or is reasonably likely to materially affect, the
Registrant's internal control over financial reporting.
Item 11. Exhibits
(a)(1) Certification pursuant to Rule 30a-2 under the Investment Company
Act of 1940 attached hereto as Exhibit 99.CERT.
(a)(2) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
LINCOLN NATIONAL VARIABLE ANNUITY FUND A (REGISTRANT)
/s/ Kelly D. Clevenger
----------------------
Kelly D. Clevenger
President
(Signature and Title)
Date: September 8, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By /s/ Kelly D. Clevenger
----------------------
Kelly D. Clevenger
Chairman of the Board and President
(Signature and Title)
Date: September 8, 2004
By /s/ Sheryl L. Sturgill
----------------------
Sheryl L. Sturgill
Chief Accounting Officer
(Signature and Title)
Date: September 8, 2004