UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: December 31, 2000
LINCOLN NATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Indiana 1-6028 35-1140070
(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
1500 Market Street, Suite 3900, Centre Square West Tower, Philadelphia,
PA 19102
(Address of principal executive offices)
Registrant's telephone number 219-448-1400
Item 9
Financial Report for the year ended December 31, 2000.
Financial Highlights
Unaudited [Amounts in Millions, except Percentages and Per Share]
For the Quarter Ended December 31 For the Year Ended December 31
--------------------------------- -------------------------------
2000 1999 2000 1999
Amount Amount Change % Change Amount Amount Change % Change
------ ------ ------ -------- ------ ------ ------ --------
Income from Operations
Life Insurance 77.6 62.6 15.0 24.0% 285.9 236.6 49.3 20.8%
Annuities 81.1 71.3 9.8 13.7% 344.9 285.8 59.1 20.7%
Lincoln UK 15.5 (67.1) 82.6 (123.1%) 61.0 (13.9) 74.9 (538.8%)
Reinsurance 37.1 (18.8) 55.9 (297.3%) 124.9 43.5 81.4 187.1%
Investment Management 1.4 8.9 (7.5) (84.3%) 14.0 32.9 (18.9) (57.4%)
Corporate & Other (27.9) (20.3) (7.6) (111.7) (109.5) (2.2)
-------- ------- ------ ------- -------- ------- ------ -------
Total Income from Operations 184.7 36.6 148.1 404.6% 719.1 475.5 243.6 51.2%
Realized Gain on Investments 1.2 1.6 (0.4) (17.5) 3.8 (21.3)
Restructuring Charges (37.0) (3.6) (33.4) (80.2) (18.9) (61.3)
-------- ------- ------ ------- -------- ------- ------ -------
Net Income 148.9 34.6 114.3 330.3% 621.4 460.4 161.0 35.0%
======== ======= ====== ====== ======== ======= ====== ======
Earnings per share (diluted)
Income from Operations $0.94 $0.19 $0.75 394.7% $3.69 $2.37 $1.32 55.7%
Realized Gain (loss)
on Investments $0.01 $0.01 $0.00 ($0.09) $0.02 ($0.11)
Restructuring Charges ($0.19) ($0.02) ($0.17) ($0.41) ($0.09) ($0.32)
-------- ------- ------ ------- -------- ------- ------ -------
Net Income $0.76 $0.18 $0.58 322.2% $3.19 $2.30 $0.89 38.7%
======== ======= ====== ======= ======== ======= ====== =======
- ----------------------------------------------------------------------------------------------------------------------------------
Income from Operations-
Excluding Special Charges
in 1999
Life Insurance 77.6 62.6 15.0 24.0% 285.9 236.6 49.3 20.8%
Annuities 81.1 71.3 9.8 13.7% 344.9 285.8 59.1 20.7%
Lincoln UK 15.5 16.9 (1.4) (8.3%) 61.0 70.1 (9.1) (13.0%)
Reinsurance 37.1 21.6 15.5 71.8% 124.9 108.9 16.0 14.7%
Investment Management 1.4 8.9 (7.5) (84.3%) 14.0 32.9 (18.9) (57.4%)
Corporate & Other (27.9) (20.3) (7.6) 37.4% (111.7) (109.5) (2.2) 2.0%
-------- ------- ------ ------- -------- ------- ------ -------
Total Income from Operations 184.7 161.0 23.7 14.7% 719.1 624.9 94.2 15.1%
Net Income-Excluding -------- ------- ------ ------- -------- ------- ------ -------
Special Charges in 1999 148.9 159.0 (10.1) (6.4%) 621.4 609.8 11.6 1.9%
======== ======= ====== ======= ======== ======= ====== =======
Earnings per share (diluted)-
Excluding Special Charges
in 1999
Income from Operations $0.94 $0.82 $0.12 14.6% $3.69 $3.12 $0.57 18.3%
Realized Gain (loss)
on Investments $0.01 $0.01 $0.00 ($0.09) $0.02 ($0.11) (550.0%)
Restructuring Charges ($0.19) ($0.02) ($0.17) 850.0% ($0.41) ($0.09) ($0.32) 355.6%
-------- ------- ------ ------- -------- ------- ------ -------
Net Income $0.76 $0.81 ($0.05) (6.2%) $3.19 $3.05 $0.14 4.6%
======== ======= ====== ======= ======== ======= ====== =======
- ----------------------------------------------------------------------------------------------------------------------------------
Operating Revenue
Life Insurance 530.5 514.2 16.4 3.2% 2012.4 1948.2 64.2 3.3%
Annuities 480.5 505.7 (25.2) (5.0%) 1987.7 1969.8 17.9 0.9%
Lincoln UK 100.6 102.4 (1.8) (1.8%) 435.0 443.6 (8.6) (1.9%)
Reinsurance 461.8 575.9 (114.1) (19.8%) 1773.3 1828.2 (54.9) (3.0%)
Investment Management 113.8 117.6 (3.7) (3.2%) 461.1 461.1 (0.1) (0.0%)
Corporate & Other 86.3 (7.5) 93.8 210.4 149.9 60.5
-------- ------- ------ ------- -------- ------- ------ -------
Total Operating Revenue 1773.5 1808.2 (34.7) (1.9%) 6879.8 6800.7 79.1 1.2%
======== ======= ====== ======= ======== ======= ====== =======
- ----------------------------------------------------------------------------------------------------------------------------------
Revenue (Including Investment
Gains/Losses)
Life Insurance 522.2 516.6 5.6 1.1% 1993.6 1945.3 48.3 2.5%
Annuities 484.9 500.9 (16.0) (3.2%) 1983.9 1958.4 25.5 1.3%
Lincoln UK 104.3 103.8 0.5 0.5% 438.2 446.6 (8.4) (1.9%)
Reinsurance 464.1 579.7 (115.6) (19.9%) 1772.3 1833.9 (61.6) (3.4%)
Investment Management 113.6 118.1 (4.6) (3.9%) 457.2 461.0 (3.8) (0.8%)
Corporate & Other 84.4 (11.2) 95.7 206.3 158.5 47.8
-------- ------- ------ ------- -------- ------- ------ -------
Total Revenue 1773.5 1807.9 (34.4) (1.9%) 6851.5 6803.7 47.8 0.7%
======== ======= ====== ======= ======== ======= ====== =======
- ----------------------------------------------------------------------------------------------------------------------------------
Operational Data by Segment:
(Billions)
Life Insurance Segment
Life Insurance First
Year Premium 0.218 0.188 0.030 16.0% 0.649 0.556 0.093 16.7%
Life Insurance In-force 216.002 194.988 21.014 10.8% 216.002 194.988 21.014 10.8%
Life Insurance Account Values 10.847 10.217 0.630 6.2% 10.847 10.217 0.630 6.2%
Annuities Segment
Annuity Gross Deposits 1.305 1.298 0.007 0.5% 5.068 4.825 0.243 5.0%
Annuity Net Cash Flows (0.526) (0.398) (0.128) (2.291) (0.803) (1.488)
Annuity Account Values 53.009 56.257 (3.248) (5.8%) 53.009 56.257 (3.248) (5.8%)
Reinsurance Segment
Individual Life In-force Sales 35.2 49.6 (14.4) (29.0%) 139.5 116.8 22.7 19.4%
Reinsurance Life In-force 436.7 340.8 95.9 28.1% 436.7 340.8 95.9 28.1%
Investment Management Segment
Retail Deposits 1.255 1.075 0.180 16.7% 4.760 4.264 0.496 11.6%
Retail Net Cash Flows 0.058 (0.410) 0.468 (1.517) (2.209) 0.692
Institutional In-flows 0.885 1.354 (0.469) (34.6%) 3.501 7.249 (3.748) (51.7%)
Institutional Net Cash Flows (1.043) (1.480) 0.437 (5.694) (2.240) (3.454)
Assets Under Management 52.895 61.374 (8.479) (13.8%) 52.895 61.374 (8.479) (13.8%)
Assets Under Management -
at Cost 35.686 35.934 (0.248) (0.7%) 35.686 35.934 (0.248) (0.7%)
Assets Under Management -
Total Segment 88.581 97.308 (8.727) (9.0%) 88.581 97.308 (8.727) (9.0%)
Financial Highlights
Unaudited [Amounts in Millions, except Percentages and Per Share]
For the Quarter Ended December 31 For the Year Ended December 31
----------------------------------------- -----------------------------------------
2000 1999 2000 1999
Amount Amount Change % Change Amount Amount Change % Change
------ ------ ------ -------- ------ ------ ------ --------
Consolidated Operational
Data: (Billions)
Annuity Deposits
Annuities Segment 1.305 1.298 0.007 0.5% 5.068 4.825 0.243 5.0%
Life Insurance Segment 0.023 0.077 (0.054) (70.4%) 0.171 0.291 (0.120) (41.2%)
-------- ------- ------ ----- -------- ------- ------ -----
Total Annuity Deposits 1.328 1.375 (0.047) (3.5%) 5.239 5.116 0.123 2.4%
======== ======= ====== ===== ======== ======= ====== =====
Annuity Net Cash Flows
Annuities Segment (0.526) (0.398) (0.128) (2.291) (0.803) (1.488)
Life Insurance Segment (0.155) (0.092) (0.063) (0.583) (0.362) (0.221)
-------- ------- ------ ----- -------- ------- ------ -----
Total Annuity Net Cash Flows (0.681) (0.490) (0.191) (2.874) (1.165) (1.709)
======== ======= ====== ===== ======== ======= ====== =====
Annuity Account Values
Annuities Segment 53.009 56.257 (3.248) (5.8%) 53.009 56.257 (3.248) (5.8%)
Life Insurance Segment 1.860 2.027 (0.167) (8.2%) 1.860 2.027 (0.167) (8.2%)
-------- ------- ------ ----- -------- ------- ------ -----
Total Annuity Account
Values 54.869 58.284 (3.415) (5.9%) 54.869 58.284 (3.415) (5.9%)
======== ======= ====== ===== ======== ======= ====== =====
Consolidated Retail
Deposits 3.138 3.014 0.124 4.1% 11.981 11.115 0.866 7.8%
Consolidated Retail
Account Balances 91.899 97.161 (5.262) (5.4%) 91.899 97.161 (5.262) (5.4%)
Total Assets Under
Management 31.294 140.443 (9.149) (6.5%) 131.294 140.443 (9.149) (6.5%)
Balance Sheet Assets -
End of Period 9857.8 103095.7 (3237.9) (3.1%) 99857.8 103095.7 (3237.9) (3.1%)
Shareholders' Equity
Beg of Period
(Securities at Market) 4538.6 4662.2 (123.6) 4263.9 5387.9 (1124.1)
End of Period
(Securities at Market) 4967.9 4263.9 704.0 4967.9 4263.9 704.0
End of Period
(Securities at Cost) 4942.0 4729.6 212.4 4942.0 4729.6 212.4
Average Equity
(Securities at Cost) 4915.7 4774.2 141.5 4831.9 4818.7 13.2
Return on Equity
Inc from Operations/
Average Equity 15.0% 3.1% 12.0% 14.9% 9.9% 5.0%
Net Income/Average
Equity 12.1% 2.9% 9.2% 12.9% 9.6% 3.3%
Adj Net Income/Adj
Average Equity 15.8% 11.8% 4.0%
Return on Capital
Inc from Operations/
Average Capital 12.4% 3.6% 8.8% 12.1% 8.5% 3.6%
Common Stock Outstanding
Average for the Period -
Diluted 195.6 197.1 (1.5) (0.8%) 194.9 200.4 (5.5) (2.7%)
End of Period - Assuming
Conv of Pref. 191.2 196.0 (4.8) (2.4%) 191.2 196.0 (4.8) (2.4%)
End of Period - Diluted 195.2 197.0 (1.8) (0.9%) 195.2 197.0 (1.8) (0.9%)
Book Value (Securities at
Market) $25.99 $21.76 4.23 19.4% $25.99 $21.76 4.23 19.4%
Book Value (Securities at
Cost) $25.85 $24.14 1.71 7.1% $25.85 $24.14 1.71 7.1%
Cash Returned to
Shareholders
Share Repurchase -
dollar amount 51.7 14.2 37.5 210.0 377.7 (167.7)
Dividends Declared to
Shareholders 58.5 56.7 1.8 224.4 219.5 4.9
-------- ------- ------ ----- -------- ------- ------ -----
Total Cash Returned
to Shareholders 110.2 70.9 39.3 434.4 597.2 (162.8)
======== ======= ====== ===== ======== ======= ====== =====
Share Repurchase -
number of shares 1.114 0.366 0.748 6.223 7.675 (1.452)
Dividend Declared on
Common Stock - per share $0.305 $0.290 $0.015 5.2% $1.175 $1.115 $0.060 5.4%
Eleven Year Summary
Unaudited [Millions of Dollars except Per Share Data]
For the Year Ended
December 31 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Revenue
Life Insurance 371.7 417.3 444.4 477.5 466.2 741.1 769.6 747.8 1558.9 1945.3 1993.6
Annuities 1073.7 1216.7 1336.2 1603.8 1506.2 1677.3 1610.2 1835.1 1912.6 1958.4 1983.9
Lincoln UK 161.1 169.6 180.6 174.9 216.0 351.5 393.2 427.3 439.7 446.6 438.2
Reinsurance 741.6 774.3 1074.6 1101.9 1267.4 1419.5 1564.4 1389.5 1580.3 1833.9 1772.3
Investment
Management 276.1 389.9 440.0 467.3 461.0 457.2
Employee Life -
Health Benefits 2454.2 2646.3 1241.6 1297.3 314.9
Corporate & Other 173.2 300.4 464.7 281.7 161.8 121.0 6.3 58.9 128.3 158.5 206.3
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Revenue 4975.5 5524.6 4742.1 4937.1 3932.5 4586.5 4733.6 4898.5 6087.1 6803.7 6851.5
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Income from Operations *
Life Insurance 25.9 31.5 46.8 37.8 34.2 60.4 69.7 67.7 180.4 236.6 285.9
Annuities 55.2 58.3 89.4 127.1 142.4 157.6 155.8 200.7 243.8 285.8 344.9
Lincoln UK 13.3 14.3 9.2 11.9 17.2 45.9 66.0 (108.3) 70.9 (13.9) 61.0
Reinsurance 55.7 31.4 38.7 22.4 51.6 (69.2) 76.5 (148.4) 107.3 43.5 124.9
Investment
Management 11.1 2.8 (0.3) 20.7 32.9 14.0
Employee Life -
Health Benefits 53.2 43.5 40.8 54.3 14.1
Corporate & Other (90.4) (70.7) (73.0) (55.8) (40.9) (64.8) (72.1) (62.1) (92.6) (109.5) (111.7)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Income
from Cont Oper 112.9 108.3 151.9 197.6 218.6 140.8 298.8 (50.6) 530.4 475.5 719.1
Discontinued
Operations 100.9 69.4 88.7 145.9 171.1 165.6 135.3 110.1
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from
Operations 213.8 177.7 240.6 343.5 389.7 306.5 434.1 59.4 530.4 475.5 719.1
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Net Income
Life Insurance 25.9 31.5 46.8 37.8 34.2 70.9 86.1 73.9 158.1 235.6 274.3
Annuities 55.2 58.3 89.4 127.1 142.4 225.9 179.6 234.0 255.6 278.4 342.4
Lincoln UK 13.3 14.3 9.2 12.6 18.5 45.7 66.0 (106.8) 71.7 (18.2) (13.2)
Reinsurance 55.7 31.4 38.7 20.7 52.2 (58.3) 88.5 (132.1) 104.7 44.1 124.9
Investment
Management 17.8 9.2 6.7 21.2 23.6 6.9
Employee Life -
Health Benefits 53.2 43.5 40.8 55.3 14.4
Corporate & Other (127.6) (46.5) 45.6 (177.1) (96.2) (0.6) (73.1) (53.5) (101.6) (103.1) (113.9)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Net Inc
from Cont Oper 75.7 132.5 270.5 76.4 165.5 301.4 356.4 22.2 509.8 460.4 621.4
Discontinued
Operations 100.9 69.4 88.7 242.5 184.4 180.8 157.2 911.8
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Net Income 176.6 201.9 359.2 318.9 349.9 482.2 513.6 934.0 509.8 460.4 621.4
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
OTHER DATA
Assets 27597.3 33660.3 39042.2 47825.1 48864.8 63257.7 71713.4 77174.7 93836.3 103095.7 99857.8
Shareholders' Equity
Securities at Market 2279.5 2655.8 2826.8 4072.3 3042.1 4378.1 4470.0 4982.9 5387.9 4263.9 4967.9
Securities at Cost 2213.2 2445.8 2664.1 3157.6 3353.1 3679.9 4057.1 4546.9 4835.6 4729.6 4942.0
Average Equity
(Securities at Cost) 2086.6 2335.3 2575.0 3009.0 3288.6 3550.5 3866.0 4214.1 4685.6 4818.7 4831.9
Common Shares
Outstanding:
(millions)
End of Period -
Diluted 176.3 185.4 187.7 208.3 208.3 209.3 210.3 209.5 203.4 197.0 195.2
Average for the
Period - Diluted 175.2 189.2 186.8 206.1 208.7 209.5 210.7 208.0 203.3 200.4 194.9
Per Share Data
(Diluted)
Income (Loss) from
Continuing
Operations $0.64 $0.57 $0.81 $0.96 $1.05 $0.67 $1.42 ($0.24) $2.61 $2.37 $3.69
Income from
Operations * $1.22 $0.94 $1.29 $1.67 $1.87 $1.46 $2.06 $0.29 $2.61 $2.37 $3.69
Net Income from
Continuing
Operations $0.43 $0.70 $1.45 $0.37 $0.79 $1.44 $1.69 $0.11 $2.51 $2.30 $3.19
Net Income $1.01 $1.07 $1.92 $1.55 $1.68 $2.30 $2.44 $4.49 $2.51 $2.30 $3.19
Shareholders' Equity:
Shareholders' Equity
(Sec at Market) $12.95 $14.35 $15.13 $19.69 $14.67 $20.95 $21.50 $24.63 $26.59 $21.76 $25.99
Shareholders' Equity
(Securities at Cost) $12.57 $13.21 $14.26 $15.27 $16.17 $17.61 $19.51 $22.48 $23.86 $24.14 $25.85
Dividends Declared
(Common Stock) $0.658 $0.693 $0.738 $0.775 $0.830 $0.875 $0.935 $0.995 $1.055 $1.115 $1.175
Return on Equity
(see page 30)
Net Income/
Average Equity 8.5% 8.6% 13.9% 10.6% 10.6% 13.6% 13.3% 22.2% 10.9% 9.6% 12.9%
Inc from Operations/
Average Equity 10.2% 7.6% 9.3% 11.4% 11.8% 8.6% 11.2% 1.4% 11.3% 9.9% 14.9%
Adj Net Income/
Adj Average Equity 11.1% 15.5% 12.8% 13.5% 14.3% 4.3% 14.1% 11.8% 15.8%
Market Value of
Common Stock
Highest Price $15.338 $13.813 $19.032 $24.125 $22.188 $26.875 $28.500 $39.063 $49.438 $57.500 $56.375
Lowest Price $7.688 $9.500 $12.625 $17.344 $17.313 $17.313 $20.375 $24.500 $33.500 $36.000 $22.625
Closing Price $10.750 $13.688 $18.500 $21.750 $17.500 $26.875 $26.250 $39.063 $40.907 $40.000 $47.313
* "Income from Operations" is defined as "Net income less realized gain (loss) on investments and sale of subsidiaries/
discontinued operations, restructuring charges and accumulated accounting change, all net of taxes."
Quarterly Revenue and Income by Segment
Unaudited [Millions of Dollars except Per Share Data]
For the Mar Jun Sep Dec Mar Jun
Quarter Ended 1998 1998 1998 1998 1999 1999
Revenue
Life Insurance 350.8 359.2 334.4 514.4 469.1 472.5
Annuities 486.1 493.8 457.0 475.7 485.6 492.3
Lincoln UK 103.5 124.2 102.8 109.2 119.1 113.1
Reinsurance 355.4 380.5 386.4 457.9 421.6 427.1
Investment
Management 118.5 118.7 107.4 122.7 117.3 114.8
Corporate &
Other 33.6 31.0 29.7 34.0 62.6 58.5
------- ------- ------- ------- ------- -------
Total Revenue 1448.0 1507.5 1417.6 1714.0 1675.4 1678.3
======= ======= ======= ======= ======= =======
Income from
Operations *
Life Insurance 32.2 44.3 44.5 59.3 54.5 58.8
Annuities 61.4 63.7 59.7 59.0 71.1 72.4
Lincoln UK 17.2 17.2 17.7 18.8 18.1 19.0
Reinsurance 27.7 24.1 29.6 26.0 34.6 24.4
Investment
Management 3.3 5.5 2.8 9.0 8.4 7.5
Corporate &
Other (13.6) (22.7) (23.7) (32.7) (31.0) (30.3)
------- ------- ------- ------- ------- -------
Income from
Operations 128.1 132.2 130.7 139.4 155.7 151.8
======= ======= ======= ======= ======= =======
Net Income
Life Insurance 14.0 49.7 41.3 53.1 52.6 56.4
Annuities 67.1 75.2 52.4 60.9 73.6 72.3
Lincoln UK 17.4 17.4 17.8 19.2 18.0 20.0
Reinsurance 30.4 25.2 24.5 24.6 35.3 24.7
Investment
Management 5.3 6.0 (0.9) 10.8 (3.6) 7.2
Corporate &
Other (12.2) (24.8) (21.7) (42.9) (30.9) (32.3)
------- ------- ------- ------- ------- -------
Total Net
Inc from
Cont Oper 122.0 148.7 113.4 125.6 145.1 148.4
------- ------- ------- ------- ------- -------
Discontinued
Operations
Total Net
Income 122.0 148.7 113.4 125.6 145.1 148.4
======= ======= ======= ======= ======= =======
OTHER DATA
Assets 87884.5 88364.6 84606.2 93836.3 95350.3 98261.4
Shareholders'
Equity
Beg of Period
(Securities
at Market) 4641.1 5054.2 5150.8 5527.6 5387.9 5107.4
End of Period
(Securities
at Market) 5054.2 5150.8 5527.6 5387.9 5107.4 4817.4
End of Period
(Securities
at Cost) 4579.2 4681.3 4753.9 4835.6 4852.8 4818.5
Average Equity
(Securities
at Cost) 4596.9 4632.0 4718.3 4795.4 4872.5 4834.2
Common Shares
Outstanding
Average for the
Period - Diluted 204.3 203.9 203.9 203.3 203.6 201.9
End of Period -
Diluted 204.2 204.5 203.9 203.4 203.2 200.9
Per Share Data
(Diluted)
Income from
Operations * $0.63 $0.65 $0.64 $0.69 $0.76 $0.75
Net Income from
Continuing
Operations $0.60 $0.73 $0.56 $0.62 $0.71 $0.73
Net Income $0.60 $0.73 $0.56 $0.62 $0.71 $0.73
Shareholders'
Equity
Shareholders'
Equity (Sec
at Market) $25.12 $25.55 $27.28 $26.59 $25.30 $24.18
Shareholders'
Equity (Sec
at Cost) $22.76 $23.22 $23.47 $23.86 $24.04 $24.18
Dividends
Declared
(Com Stk) $0.260 $0.260 $0.260 $0.275 $0.275 $0.275
Return on
Equity
(see page 30)
Net Income/
Average Equity 10.6% 12.8% 9.6% 10.5% 11.9% 12.3%
Inc from
Operations/
Average Equity 11.2% 11.4% 11.1% 11.6% 12.8% 12.6%
Market Value
of Common Stock
Highest Price $43.250 $47.063 $49.438 $43.344 $50.250 $53.438
Lowest Price $36.125 $41.844 $41.125 $33.500 $39.281 $45.688
Closing Price $42.625 $45.688 $41.125 $40.906 $49.438 $52.313
Quarterly Revenue and Income by Segment
Unaudited [Millions of Dollars except Per Share Data]
For the Sep Dec Mar Jun Sep Dec
Quarter Ended 1999 1999 2000 2000 2000 2000
Revenue
Life Insurance 487.1 516.6 486.4 488.1 496.8 522.2
Annuities 479.5 500.9 511.1 493.7 494.1 484.9
Lincoln UK 110.5 103.8 112.8 108.2 112.8 104.3
Reinsurance 405.5 579.7 395.5 458.3 454.4 464.1
Investment
Management 110.7 118.1 116.5 111.3 115.9 113.6
Corporate &
Other 48.7 (11.2) 46.8 33.1 42.0 84.4
------- ------- ------- ------- ------- -------
Total Revenue 1642.1 1807.9 1669.2 1692.7 1716.1 1773.5
======= ======= ======= ======= ======= =======
Income from
Operations *
Life Insurance 60.6 62.6 67.1 69.0 72.2 77.6
Annuities 71.1 71.3 85.0 80.4 98.5 81.1
Lincoln UK 16.2 (67.1) 15.7 19.3 10.6 15.5
Reinsurance 3.3 (18.8) 32.8 26.4 28.7 37.1
Investment
Management 8.1 8.9 5.3 4.4 3.0 1.4
Corporate &
Other (27.9) (20.3) (35.2) (26.4) (22.2) (27.9)
------- ------- ------- ------- ------- -------
Income from
Operations 131.4 36.6 170.6 173.0 190.7 184.7
======= ======= ======= ======= ======= =======
Net Income
Life Insurance 61.9 64.8 64.4 65.1 72.6 72.2
Annuities 64.3 68.1 88.1 80.5 89.9 83.9
Lincoln UK 16.4 (72.6) 15.5 19.1 (29.9) (17.9)
Reinsurance 0.4 (16.4) 34.0 25.3 26.5 39.2
Investment
Management 7.7 12.2 5.2 (0.3) 2.7 (0.7)
Corporate &
Other (18.4) (21.5) (36.8) (26.1) (23.2) (27.8)
------- ------- ------- ------- ------- -------
Total Net
Inc from ------- ------- ------- ------- ------- -------
Cont Oper 132.3 34.6 170.2 163.6 138.6 148.9
======= ======= ======= ======= ======= =======
Discontinued
Operations
Total Net
Income 132.3 34.6 170.2 163.6 138.6 148.9
OTHER DATA
Assets 96500.7 103095.7 106340.0 103847.6 103243.1 99857.8
Shareholders'
Equity Beg
of Period
(Securities
at Market) 4817.4 4662.2 4263.9 4340.4 4223.7 4538.6
End of Period
(Securities
at Market) 4662.2 4263.9 4340.4 4223.7 4538.6 4967.9
End of Period
(Securities
at Cost) 4766.0 4729.6 4751.6 4780.3 4876.3 4942.0
Average Equity
(Securities
at Cost) 4793.9 4774.2 4791.5 4753.0 4867.2 4915.7
Common Shares
Outstanding
Average for the
Period - Diluted 199.0 197.1 195.8 194.0 195.6 195.6
End of Period -
Diluted 196.9 197.0 195.1 193.7 196.2 195.2
Per Share Data
(Diluted)
Income from
Operations * $0.66 $0.19 $0.87 $0.89 $0.98 $0.94
Net Income from
Continuing
Operations $0.66 $0.18 $0.87 $0.84 $0.71 $0.76
Net Income $0.66 $0.18 $0.87 $0.84 $0.71 $0.76
Shareholders'
Equity
Shareholders'
Equity (Sec
at Market) $23.76 $21.76 $22.45 $22.10 $23.67 $25.99
Shareholders'
Equity (Sec
at Cost) $24.28 $24.14 $24.58 $25.01 $25.43 $25.85
Dividends
Declared
(Com Stk) $0.275 $0.290 $0.290 $0.290 $0.290 $0.305
Return on
Equity
(see page 30)
Net Income/
Average Equity 11.0% 2.9% 14.2% 13.8% 11.4% 12.1%
Inc from
Operations/
Average Equity 11.0% 3.1% 14.2% 14.6% 15.7% 15.0%
Market Value
of Common Stock
Highest Price $57.500 $48.313 $41.375 $40.063 $56.375 $50.938
Lowest Price $36.000 $36.500 $22.625 $29.000 $35.625 $40.875
Closing Price $37.563 $40.000 $33.500 $36.125 $48.125 $47.313
* "Income from Operations" is defined as "Net income less realized gain (loss) on investments and sale of
subsidiaries/discontinued operations, restructuring charges and accumulated accounting change, all net of taxes."
Reconciliation of Business Segments to Consolidated Income Statement
Unaudited [Millions of Dollars]
For the Quarter Ended December 31 Life Insurance Annuities Lincoln UK Reinsurance
--------------- ---------------- --------------- -----------------
Dec Dec Dec Dec Dec Dec Dec Dec
2000 1999 2000 1999 2000 1999 2000 1999
----- ----- ----- ----- ----- ----- ----- -----
Operating Revenue
Life and annuity premiums 67.1 71.1 16.2 21.0 39.7 37.2 273.2 231.9
Surrender charges 20.6 18.7 8.4 9.1 0.8 0.7
Mortality assessments 122.1 113.9 7.5 5.0 0.0 (0.2)
Expense assessments 55.5 48.0 154.2 140.5 34.6 37.2 (0.0) (0.2)
Health premiums 0.0 0.0 0.8 1.6 88.6 232.0
Investment advisory fees
Other revenue and fees 4.7 4.0 2.3 6.3 1.3 3.8 21.3 32.4
Net investment income 260.4 258.4 299.4 328.8 16.7 17.7 77.4 77.4
Earnings in Unconsolidated
Affiliates 0.6 1.8
----- ----- ----- ----- ----- ----- ----- -----
Operating Revenue 530.5 514.2 480.5 505.7 100.6 102.4 461.8 575.9
----- ----- ----- ----- ----- ----- ----- -----
Benefits and Expenses
Ins. benefits paid or provided:
Life and annuity policy benefits 121.1 112.9 59.0 77.2 50.7 207.9 199.2 174.5
Div accum & div to policyholders 25.3 21.0 2.1 2.2
Interest credited to policy bal. 161.7 149.4 188.0 206.9 11.9 21.5
Health policy benefits 0.0 0.0 3.5 3.9 88.2 153.9
Underwriting, acquisition,
insurance and other expenses 97.2 126.3 138.1 127.6 34.9 51.4 102.9 254.6
Goodwill amortization 5.9 6.0 0.3 0.5 0.2 3.3 0.4 0.4
Interest (0.0) 0.0 3.2 1.0
----- ----- ----- ----- ----- ----- ----- -----
Total Benefits and Expenses 411.2 415.6 385.5 412.2 89.3 266.6 407.9 608.2
----- ----- ----- ----- ----- ----- ----- -----
Income from Operations Before Tax 119.4 98.5 95.0 93.5 11.3 (164.2) 53.9 (32.2)
Federal income taxes 41.8 35.9 14.0 22.2 (4.2) (97.1) 16.8 (13.4)
Income from Operations 77.6 62.6 81.1 71.3 15.5 (67.1) 37.1 (18.8)
----- ----- ----- ----- ----- ----- ----- -----
Restructuring charges (36.1) (6.5) 0.7
Realized gains on investments (5.4) 2.2 2.9 (3.1) 2.6 1.0 1.4 2.4
----- ----- ----- ----- ----- ----- ----- -----
Net Income 72.2 64.8 83.9 68.1 (17.9) (72.6) 39.2 (16.4)
===== ===== ===== ===== ===== ===== ====== ======
- -------------------------------------------------------------------------------------------------------------------------------
Investment Corporate and Consolidating
Management Other Operations Adjustments Consolidated
--------------- ---------------- --------------- ---------------
Dec Dec Dec Dec Dec Dec Dec Dec
2000 1999 2000 1999 2000 1999 2000 1999
----- ----- ----- ----- ----- ----- ----- -----
Operating Revenue
Life and annuity premiums 396.1 361.1
Surrender charges 0.5 0.7 30.3 29.2
Mortality assessments 129.6 118.7
Expense assessments 0.0 12.8 12.8 257.1 238.3
Health premiums 0.0 0.0 89.4 233.6
Investment advisory fees 70.3 71.4 (16.7) (17.3) 53.6 54.1
Other revenue and fees 29.5 32.0 105.1 8.0 (19.7) (15.4) 144.6 71.2
Net investment income 14.0 14.2 22.8 23.9 (18.6) (20.3) 672.1 700.1
Earnings in Unconsolidated Affiliates 0.6 1.8
----- ----- ----- ----- ----- ----- ------ ------
Operating Revenue 113.8 117.6 128.0 31.9 (41.8) (39.4) 1773.5 1808.2
----- ----- ----- ----- ----- ----- ------ ------
Benefits and Expenses
Ins. benefits paid or provided:
Life and annuity policy benefits 430.0 572.5
Div accum & div to policyholders 27.4 23.3
Interest credited to policy bal. 9.9 10.7 371.5 388.5
Health policy benefits 0.1 (0.0) 91.8 157.8
Underwriting, acquisition,
insurance and other expenses 108.0 99.7 125.4 4.3 (33.6) (33.4) 572.9 630.5
Goodwill amortization 4.1 4.1 0.3 (0.1) 10.9 14.6
Interest (0.0) 0.0 53.5 54.0 (23.3) (20.3) 33.4 34.7
----- ----- ----- ----- ----- ----- ------ ------
Total Benefits and Expenses 112.0 103.7 179.0 58.6 (47.0) (43.1) 1537.9 1821.8
----- ----- ----- ----- ----- ----- ------ ------
Income from Operations Before Tax 1.8 13.8 (51.0) (26.7) 5.2 3.7 235.6 (13.6)
Federal income taxes 0.4 4.9 (21.6) (3.9) 3.7 1.2 50.9 (50.2)
----- ----- ----- ----- ----- ----- ------ ------
Income from Operations 1.4 8.9 (29.4) (22.8) 1.5 2.5 184.7 36.6
Restructuring charges (1.9) 2.9 0.3 (37.0) (3.6)
Realized gains on investments (0.2) 0.4 (0.8) (0.8) 0.6 (0.3) 1.2 1.6
----- ----- ----- ----- ----- ----- ------ ------
Net Income (0.7) 12.2 (29.9) (23.6) 2.1 2.1 148.9 34.6
===== ===== ===== ===== ===== ===== ===== =====
Reconciliation of Business Segments to Consolidated Income Statement
Unaudited [Millions of Dollars]
For the Year Ended December 31 Life Insurance Annuities Lincoln UK Reinsurance
---------------- ---------------- -------------- ----------------
Dec Dec Dec Dec Dec Dec Dec Dec
2000 1999 2000 1999 2000 1999 2000 1999
------ ------ ------ ------ ----- ----- ------ ------
Operating Revenue
Life and annuity premiums 227.3 236.1 64.2 64.9 143.3 139.1 968.5 743.1
Surrender charges 69.8 69.1 38.4 35.0 3.7 2.8
Mortality assessments 465.2 444.6 31.4 27.1 0.0 0.7
Expense assessments 191.8 165.9 628.3 536.2 178.1 182.3 (0.0) 0.3
Health premiums 0.1 0.1 5.1 6.1 404.6 692.3
Investment advisory fees
Other revenue and fees 15.8 16.3 9.7 8.4 6.9 13.8 72.7 64.6
Net investment income 1042.3 1016.0 1247.1 1325.4 70.3 75.3 321.7 318.6
Earnings in Unconsolidated Affiliates 2.1 5.8
------ ------ ------ ------ ----- ----- ------ ------
Operating Revenue 2012.4 1948.2 1987.7 1969.8 435.0 443.6 1773.3 1828.2
------ ------ ------ ------ ----- ----- ------ ------
Benefits and Expenses
Ins. benefits paid or provided:
Life and annuity policy benefits 411.7 430.9 254.5 258.6 164.1 293.5 716.1 530.6
Div accum & div to policyholders 80.8 81.5 6.7 6.9
Interest credited to policy bal. 630.0 599.1 761.5 819.9 42.2 47.3
Health policy benefits 0.1 0.1 14.4 12.8 434.8 646.5
Underwriting, acquisition,
insurance and other expenses 418.5 441.3 553.0 529.0 180.0 223.5 379.8 531.2
Goodwill amortization 23.7 23.4 (0.6) 2.0 4.0 7.0 1.8 0.4
Interest 0.1 11.2 1.0
------ ------ ------ ------ ----- ----- ------ ------
Total Benefits and Expenses 1564.7 1576.4 1568.4 1609.5 362.6 536.7 1592.6 1763.9
------ ------ ------ ------ ----- ----- ------ ------
Income from Operations Before Tax 447.7 371.8 419.3 360.3 72.4 (93.1) 180.7 64.3
Federal income taxes 161.8 135.2 74.4 74.4 11.3 (79.2) 55.8 20.8
------ ------ ------ ------ ----- ----- ------ ------
Income from Operations 285.9 236.6 344.9 285.8 61.0 (13.9) 124.9 43.5
Restructuring charges (76.5) (6.5) 0.7 (3.2)
Realized gains on investments (11.6) (1.0) (2.5) (7.4) 2.3 2.1 (0.7) 3.7
------ ------ ------ ------ ----- ----- ------ ------
Net Income 274.3 235.6 342.4 278.4 (13.2) (18.2) 124.9 44.1
====== ====== ====== ====== ===== ===== ====== ======
- ----------------------------------------------------------------------------------------------------------------------------
Investment Corporate and Consolidating
Management Other Operations Adjustments Consolidated
---------------- ---------------- -------------- ----------------
Dec Dec Dec Dec Dec Dec Dec Dec
2000 1999 2000 1999 2000 1999 2000 1999
------ ------ ------ ------ ----- ----- ------ ------
Operating Revenue
Life and annuity premiums (0.1) 1403.3 1183.0
Surrender charges 2.8 3.2 114.7 110.2
Mortality assessments 24.0 496.5 496.4
Expense assessments 0.1 52.0 46.3 1050.2 930.9
Health premiums 0.0 0.0 409.8 698.5
Investment advisory fees 277.7 286.3 (64.6) (62.5) 213.1 223.8
Other revenue and fees 124.7 117.0 282.4 181.3 (66.9) (56.8) 445.4 344.5
Net investment income 58.6 57.9 93.4 94.7 (86.3) (80.4) 2747.1 2807.5
Earnings in Unconsolidated Affiliates (2.4) (0.4) 5.8
------ ------ ------ ------ ----- ----- ------ ------
Operating Revenue 461.1 461.1 373.5 300.0 (163.1) (150.1) 6879.8 6800.7
------ ------ ------ ------ ----- ----- ------ ------
Benefits and Expenses
Ins. benefits paid or provided:
Life and annuity policy benefits 33.0 1546.4 1546.6
Div accum & div to policyholders 87.6 88.4
Interest credited to policy bal. 0.0 40.5 44.1 1474.2 1510.4
Health policy benefits (0.3) 0.4 449.0 659.7
Underwriting, acquisition,
insurance and other expenses 422.5 393.3 335.5 221.4 (120.9) (121.2) 2168.4 2218.5
Goodwill amortization 16.2 16.2 0.0 0.3 (0.1) 45.1 49.2
Interest 0.0 0.0 219.3 212.9 (91.0) (80.4) 139.5 133.7
------ ------ ------ ------ ----- ----- ------ ------
Total Benefits and Expenses 438.7 409.5 554.6 467.9 (171.4) (157.6) 5910.3 6206.4
------ ------ ------ ------ ----- ----- ------ ------
Income from Operations Before Tax 22.4 51.6 (181.2) (167.9) 8.3 7.4 969.6 594.4
Federal income taxes 8.4 18.7 (64.9) (52.2) 3.7 1.2 250.5 118.9
------ ------ ------ ------ ----- ----- ------ ------
Income from Operations 14.0 32.9 (116.3) (115.8) 4.5 6.2 719.1 475.5
Restructuring charges (4.6) (9.2) 0.3 (80.2) (18.9)
Realized gains on investments (2.5) (0.1) 8.4 15.7 (10.9) (9.3) (17.5) 3.8
------ ------ ------ ------ ----- ----- ------ ------
Net Income 6.9 23.6 (107.6) (100.1) (6.3) (3.0) 621.4 460.4
====== ====== ====== ====== ===== ===== ====== ======
Statement of Consolidated Income
Unaudited [Millions of Dollars]
For the Year Ended December 31 1996 1997 1998 1999 2000
------ ------ ------ ------ ------
Operating Revenue
Life and annuity premiums 728.7 756.2 985.6 1183.0 1403.3
Surrender charges 40.9 45.4 91.5 110.2 114.7
Mortality assessments 180.8 186.4 380.1 496.4 496.5
Expense assessments 491.8 600.3 803.0 930.9 1050.2
Health premiums 790.4 572.6 635.1 698.5 409.8
Investment advisory fees 180.8 204.9 227.1 223.8 213.1
Other revenue and fees 138.2 157.3 261.0 344.5 445.4
Net investment income 2087.9 2250.8 2681.4 2807.5 2747.1
Earnings in Unconsolidated Affiliates 1.4 2.1 3.3 5.8 (0.4)
------ ------ ------ ------ ------
Operating Revenue 4641.1 4775.9 6068.0 6800.7 6879.8
------ ------ ------ ------ ------
Benefits and Expenses
Ins. benefits paid or provided:
Life and annuity policy benefits 835.7 1090.2 1237.7 1546.6 1546.4
Div accum & div to policyholders 33.4 29.7 78.0 88.4 87.6
Interest credited to policy bal. 1167.2 1238.7 1446.2 1510.4 1474.2
Health policy benefits 673.6 833.1 566.9 659.7 449.0
Underwriting, acquisition,
insurance and other expenses 1417.0 1557.3 1844.2 2218.5 2168.4
Goodwill amortization 13.9 15.6 44.5 49.2 45.1
Interest 84.7 92.5 117.1 133.7 139.5
------ ------ ------ ------ ------
Total Benefits and Expenses 4225.4 4857.2 5334.6 6206.4 5910.3
------ ------ ------ ------ ------
Income from Operations Before Tax 415.7 (81.3) 733.4 594.4 969.6
Federal income taxes 116.9 (30.6) 203.0 118.9 250.5
------ ------ ------ ------ ------
Income from Continuing Operations 298.8 (50.6) 530.4 475.5 719.1
Discontinued Operations 157.2 911.8
Restructuring charges (34.3) (18.9) (80.2)
Realized gains on investments 57.6 72.9 13.7 3.8 (17.5)
------ ------ ------ ------ ------
Realized gains on sale of subsidiary
Net Income 513.6 934.0 509.8 460.4 621.4
====== ====== ====== ====== ======
- ------------------------------------------------------------------------------------------------------------------
For the Quarter Ended Mar Jun Sep Dec Mar Jun Sep
1998 1998 1998 1998 1999 1999 1999
------ ------ ------ ------ ------ ------ ------
Operating Revenue
Life and annuity premiums 205.2 201.5 230.8 348.0 284.2 274.0 263.8
Surrender charges 21.8 21.3 21.5 26.9 25.5 27.1 28.4
Mortality assessments 89.0 93.4 67.7 130.0 137.3 122.2 118.2
Expense assessments 189.1 213.8 201.9 198.2 215.3 231.5 245.9
Health premiums 142.4 172.5 155.8 164.5 154.9 160.3 149.6
Investment advisory fees 58.0 59.0 52.5 57.5 58.8 56.3 54.6
Other revenue and fees 58.7 61.1 64.8 76.4 86.4 109.0 77.9
Net investment income 658.4 658.7 649.6 714.7 709.5 700.8 697.1
Earnings in Unconsolidated Affiliates 1.5 0.7 (0.2) 1.3 1.6 1.1 1.2
------ ------ ------ ------ ------ ------ ------
Operating Revenue 1424.1 1482.0 1444.3 1717.6 1673.4 1682.4 1636.7
------ ------ ------ ------ ------ ------ ------
Benefits and Expenses
Ins. benefits paid or provided:
Life and annuity policy benefits 254.8 278.6 264.3 440.0 344.6 335.5 294.0
Div accum & div to policyholders 19.6 9.8 20.7 27.9 21.5 22.5 21.2
Interest credited to policy bal. 378.6 348.5 338.5 380.6 375.1 377.1 369.7
Health policy benefits 134.3 158.9 142.6 131.0 145.5 166.6 189.8
Underwriting, acquisition,
insurance and other expenses 430.7 459.2 463.1 491.2 522.4 532.1 533.4
Goodwill amortization 8.3 11.0 9.2 16.0 11.8 9.9 12.9
Interest 23.4 27.7 32.5 33.5 33.1 32.6 33.3
------ ------ ------ ------ ------ ------ ------
Total Benefits and Expenses 1249.6 1293.8 1271.0 1520.3 1454.1 1476.3 1454.1
------ ------ ------ ------ ------ ------ ------
Income from Operations Before Tax/Min 174.5 188.2 173.4 197.4 219.3 206.1 182.6
Federal income taxes 46.4 56.0 42.6 58.0 63.6 54.2 51.2
------ ------ ------ ------ ------ ------ ------
Inc from Operations Before Min Int 128.1 132.2 130.7 139.4 155.7 151.8 131.4
Minority Interest
------ ------ ------ ------ ------ ------ ------
Income from Operations 128.1 132.2 130.7 139.4 155.7 151.8 131.4
Restructuring charges (20.0) (14.3) (12.1) (3.2)
Realized gains on investments 13.9 16.5 (17.3) 0.5 1.5 (3.5) 4.1
------ ------ ------ ------ ------ ------ ------
Net Income 122.0 148.7 113.4 125.6 145.1 148.4 132.3
====== ====== ====== ====== ====== ====== ======
For the Quarter Ended Dec Mar Jun Sep Dec
1999 2000 2000 2000 2000
------ ------ ------ ------ ------
Operating Revenue
Life and annuity premiums 361.1 331.2 337.1 339.0 396.1
Surrender charges 29.2 28.7 29.8 25.9 30.3
Mortality assessments 118.7 118.5 122.5 125.9 129.6
Expense assessments 238.3 261.1 258.6 273.4 257.1
Health premiums 233.6 58.4 144.0 117.9 89.4
Investment advisory fees 54.1 54.0 52.2 53.3 53.6
Other revenue and fees 71.2 106.1 88.7 106.0 144.6
Net investment income 700.1 711.1 673.8 690.0 672.1
Earnings in Unconsolidated Affiliates 1.8 1.0 (3.6) 1.6 0.6
------ ------ ------ ------ ------
Operating Revenue 1808.2 1670.2 1703.0 1733.1 1773.5
------ ------ ------ ------ ------
Benefits and Expenses
Ins. benefits paid or provided:
Life and annuity policy benefits 572.5 356.1 370.1 390.2 430.0
Div accum & div to policyholders 23.3 21.7 20.2 18.2 27.4
Interest credited to policy bal. 388.5 373.9 366.8 362.0 371.5
Health policy benefits 157.8 114.3 119.9 123.0 91.8
Underwriting, acquisition,
insurance and other expenses 630.5 525.7 537.5 532.4 572.9
Goodwill amortization 14.6 10.2 12.0 12.0 10.9
Interest 34.7 36.3 35.4 34.4 33.4
------ ------ ------ ------ ------
Total Benefits and Expenses 1821.8 1438.2 1461.9 1472.2 1537.9
------ ------ ------ ------ ------
Income from Operations Before Tax/Min (13.6) 232.0 241.1 260.8 235.6
Federal income taxes (50.2) 61.6 67.9 70.1 50.9
------ ------ ------ ------ ------
Inc from Operations Before Min Int 36.6 170.4 173.2 190.7 184.7
Minority Interest (0.2) 0.2 (0.0) 0.0
------ ------ ------ ------ ------
Income from Operations 36.6 170.6 173.0 190.7 184.7
Restructuring charges (3.6) (2.7) (40.5) (37.0)
Realized gains on investments 1.6 (0.4) (6.7) (11.6) 1.2
------ ------ ------ ------ ------
Net Income 34.6 170.2 163.6 138.6 148.9
====== ====== ====== ====== ======
Reconciliation of Business Segments to Consolidated Balance Sheets
Unaudited [Millions of Dollars]
Life Insurance Annuities Lincoln UK Reinsurance
--------------- --------------- --------------- ---------------
ASSETS Dec Dec Dec Dec Dec Dec Dec Dec
2000 1999 2000 1999 2000 1999 2000 1999
----- ----- ----- ----- ----- ----- ----- -----
Investments
Corporate bonds 7445.9 7231.7 7800.2 8994.0 457.6 386.5 2554.1 2378.3
U.S. government bonds 92.2 83.7 20.0 21.1 259.6 226.2
Foreign government bonds 141.6 169.9 119.7 216.1 444.8 395.3 71.1 82.1
Asset/Mortgage backed securities 1143.8 1193.4 1985.1 2486.3 261.4 263.6
State and municipal bonds 7.9 7.7 6.3 6.6 0.3 0.3
Preferred stocks-redeemable 27.6 26.8 117.5 112.2 4.3 3.8
Common stocks 13.6 15.0 265.2 315.2 2.2 2.2
Preferred stocks-equity 9.2 13.7 45.8 44.1 1.1 0.0
Mortgage loans 1967.9 1987.9 2122.0 2275.9 0.3 0.4 360.9 315.3
Real estate 0.3 0.4
Policy loans 1440.5 1389.1 509.9 490.9 10.5 12.5
Other long-term investments 17.6 3.6 4.5 7.5 25.0 35.0
------- ------- ------- ------- ------ ------ ------ ------
Total Investments 12307.9 12122.5 12731.1 14654.8 1178.8 1110.2 3540.1 3307.0
Intercompany investments 1898.0 1195.8 3740.0 2730.9 532.7 594.0
Invest in unconsol affiliates 6.4 25.8
Cash and invested cash (61.2) (14.4) (114.7) (130.8) 253.5 258.2 145.7 141.2
Property and equipment 7.0 3.0 50.8 56.7 13.8 10.2
Premium and fees receivable 45.9 26.0 (2.2) 0.1 214.2 190.3
Accrued investment income 196.6 193.1 183.7 202.5 22.8 20.4 51.9 52.3
Assets held in separate accounts 1270.1 1039.3 39322.1 41770.5 6440.9 7220.4
Federal income tax recoverable
Amount recoverable from reinsurers 2167.2 2291.0 131.3 133.5 1616.5 1710.3
Deferred acquisition costs 1097.7 901.4 794.1 811.0 635.0 679.7 459.6 331.3
Other intangible assets 1040.5 1159.7 169.2 193.6 273.6 301.8 12.8 14.2
Goodwill 878.7 902.4 45.2 44.6 13.0 46.5 33.7 97.9
Other 255.4 121.4 103.5 3.4 (104.9) 18.9 345.3 283.1
------- ------- ------- ------- ------ ------ ------ ------
Total Assets 21103.9 19941.3 57103.4 60414.0 8763.7 9712.8 6972.7 6757.7
======= ======= ======= ======= ====== ====== ====== ======
- ----------------------------------------------------------------------------------------------------------------------------
Investment Corporate and Consolidating
Management Other Operations Adjustments Consolidated
--------------- --------------- --------------- ---------------
ASSETS Dec Dec Dec Dec Dec Dec Dec Dec
2000 1999 2000 1999 2000 1999 2000 1999
----- ----- ----- ----- ----- ----- ----- -----
Investments
Corporate bonds 333.6 383.3 2658.3 1745.6 21249.7 21119.5
U.S. government bonds 0.2 0.3 170.8 206.9 542.9 538.3
Foreign government bonds 543.9 584.2 1321.1 1447.5
Asset/Mortgage backed securities 49.0 59.6 721.0 401.0 4160.4 4404.0
State and municipal bonds 14.6 14.7
Preferred stocks-redeemable 9.6 9.2 2.2 12.7 161.2 164.7
Common stocks 176.8 182.0 457.8 514.5
Preferred stocks-equity 2.4 2.0 54.5 29.7 113.1 89.5
Mortgage loans 95.5 113.9 116.3 42.1 4663.0 4735.4
Real estate 283.0 256.3 (1.3) (0.4) 282.0 256.2
Policy loans 1960.9 1892.4
Other long-term investments 5.4 1666.2 1601.6 (1250.0) (1251.3) 463.3 401.8
------ ------ ------ ------ ------ ------ ------- --------
Total Investments 490.4 573.6 6393.0 5062.1 (1251.3) (1251.7) 35389.8 35578.4
Intercompany investments 249.1 208.4 (1243.0) 310.1 (5176.7) (5039.2) (0.0) 0.0
Invest in unconsol affiliates 6.4 25.8
Cash and invested cash 68.6 55.5 1833.0 1809.2 (197.5) (223.0) 1927.4 1895.9
Property and equipment 22.6 21.5 133.9 112.4 228.2 203.8
Premium and fees receivable 34.4 52.2 1.4 1.3 3.0 (10.3) 296.7 259.6
Accrued investment income 7.8 8.4 83.6 56.4 546.4 533.2
Assets held in separate accounts 1.8 3546.7 3622.3 50579.9 53654.2
Federal income tax recoverable 200.1 345.0 200.1 345.0
Amount recoverable from reinsurers 33.0 28.8 (200.3) (209.3) 3747.7 3954.3
Deferred acquisition costs 2.9 3.4 81.1 73.5 3070.5 2800.3
Other intangible assets 60.9 77.1 1557.0 1746.5
Goodwill 316.9 333.2 0.2 (1.6) (1.7) 1286.0 1423.0
Other 188.6 153.2 556.0 327.4 (322.2) (231.8) 1021.6 675.7
------ ------ ------ ------ ------ ------ ------- --------
Total Assets 1439.0 1483.1 7793.7 7712.9 (3318.6) (2926.0) 99857.8 103095.7
====== ====== ====== ====== ====== ====== ======= ========
Reconciliation of Business Segments to Consolidated Balance Sheets
Unaudited [Millions of Dollars]
Life Insurance Annuities Lincoln UK Reinsurance
--------------- --------------- --------------- ---------------
LIABILITIES and
SHAREHOLDERS' EQUITY Dec Dec Dec Dec Dec Dec Dec Dec
2000 1999 2000 1999 2000 1999 2000 1999
----- ----- ----- ----- ----- ----- ----- -----
Liabilities
Insurance and Inv
Contract Liabilities:
Life and annuity reserves 12898.6 12370.2 2571.8 2511.8 1529.1 1548.0 944.9 768.7
Premium deposit funds 2886.0 3249.1 13459.3 14844.7 32.9 55.2 753.2 839.6
Participating
policyholders' funds 139.4 132.0
Other policyholders' funds 515.4 466.1 6.8 6.4
Unpaid claims - life
and health 110.0 103.9 5.2 3.4 46.6 43.0 1154.4 1119.0
Health reserves 0.1 0.1 50.7 51.8 2442.1 2429.6
Unearned premiums 0.1 0.1 46.4 74.8
Liab related to
separate accounts 1270.1 1039.3 39322.1 41770.5 6440.9 7220.4
------- ------- -------- ------- -------- ------- ------- -------
Total Insurance and Inv
Contract Liabilities 17819.6 17360.8 55358.4 59130.4 8100.3 8918.5 5347.8 5238.2
Federal income taxes (122.5) (272.1) (100.5) (203.0) 3.1 72.7 36.2 (15.6)
Short-term debt 0.3 224.0 161.0
Long-term debt
Minority Interest in pref.
securities of sub.
Other liabilities 565.4 110.9 277.7 285.7 167.4 154.1 262.0 328.7
------- ------- -------- ------- -------- ------- ------- -------
Total Liabilities 18262.5 17199.9 55535.6 59213.1 8270.8 9145.3 5870.0 5712.3
------- ------- -------- ------- -------- ------- ------- -------
Net unrealized gains
on securities (42.0) (144.3) (47.6) (105.0) 52.6 46.4 4.8 (40.1)
Other shareholders' equity 2883.5 2885.7 1615.3 1305.8 440.2 521.1 1098.0 1085.4
------- ------- -------- ------- -------- ------- ------- -------
Shareholders' Equity 2841.5 2741.3 1567.8 1200.9 492.8 567.5 1102.8 1045.4
------- ------- -------- ------- -------- ------- ------- -------
Total Liabilities and
S/Hs' Equity 21103.9 19941.3 57103.4 60414.0 8763.7 9712.8 6972.7 6757.7
======= ======= ======== ======= ======== ======= ======= =======
- ----------------------------------------------------------------------------------------------------------------------------
Investment Corporate and Consolidating
Management Other Operations Adjustments Consolidated
--------------- --------------- ------------- ---------------
LIABILITIES and
SHAREHOLDERS' EQUITY Dec Dec Dec Dec Dec Dec Dec Dec
2000 1999 2000 1999 2000 1999 2000 1999
----- ----- ----- ----- ----- ----- ----- -----
Liabilities
Insurance and Inv
Contract Liabilities:
Life and annuity reserves 0.0 (103.2) (127.4) 17841.2 17071.4
Premium deposit funds 584.0 635.4 17715.5 19624.1
Participating policyholders' funds 139.4 132.0
Other policyholders' funds 522.2 472.6
Unpaid claims - life and health 0.5 0.5 (0.0) 1316.6 1269.8
Health reserves 30.9 26.2 2523.8 2507.8
Unearned premiums (0.0) 1.0 46.5 75.8
Liab related to separate accounts 1.8 3546.7 3622.3 50579.9 53654.2
------- ------- -------- ------- -------- ------- ------- --------
Total Insurance and Inv
Contract Liabilities 31.4 29.5 4027.6 4130.4 90685.1 94807.7
Federal income taxes 28.3 33.4 (43.9) 27.8 199.3 356.8
Short-term debt 525.9 677.4 (436.9) (378.5) 312.9 460.2
Long-term debt 1962.2 1962.0 (1250.0) (1250.0) 712.2 712.0
Minority Interest in pref.
securities of sub. 745.0 745.0 745.0 745.0
Other liabilities 859.1 886.2 981.9 1069.5 (678.7) (728.3) 2434.7 2107.0
------- ------- -------- ------- -------- ------- ------- --------
Total Liabilities 887.4 919.7 4202.4 4511.1 1861.3 2130.4 94890.0 98831.9
------- ------- -------- ------- -------- ------- ------- --------
Net unrealized gains
on securities (0.5) (3.2) 54.0 (201.8) 4.5 (17.8) 25.8 (465.7)
Other shareholders' equity 552.2 566.6 3537.2 3403.6 (5184.4) (5038.7) 4942.0 4729.6
------- ------- -------- ------- -------- ------- ------- --------
Shareholders' Equity 551.6 563.4 3591.3 3201.8 (5179.9) (5056.5) 4967.9 4263.9
------- ------- -------- ------- -------- ------- ------- --------
Total Liabilities and
S/Hs' Equity 1439.0 1483.1 7793.7 7712.9 (3318.6) (2926.0) 99857.8 103095.7
======= ======= ======== ======= ======== ======= ======= ========
Five Year Comparative Balance Sheet
Unaudited [Millions of Dollars except Common Share Data]
ASSETS 1996 1997 1998 1999 2000
Investments
Corporate bonds 15451.0 16633.3 22505.2 21119.5 21249.7
U.S. government bonds 1305.1 662.4 1134.6 538.3 542.9
Foreign government bonds 1781.4 1804.4 1321.2 1447.5 1321.1
Mortgage backed securities 5144.5 4529.3 5080.5 4404.0 4160.4
State and municipal bonds 237.2 241.4 16.7 14.7 14.6
Preferred stocks-redeemable 177.4 195.5 174.6 164.7 161.2
Common stocks 486.3 572.3 463.1 514.5 457.8
Preferred stocks-equity 71.2 88.2 79.8 89.5 113.1
Mortgage loans 3240.7 3288.1 4393.1 4735.4 4663.0
Real estate 655.0 576.0 488.7 256.2 282.0
Policy loans 734.8 763.1 1840.0 1892.4 1960.9
Other long-term investments 445.3 464.8 432.0 401.8 463.3
-------- -------- -------- -------- --------
Total Investments 29730.0 29818.8 37929.5 35578.4 35389.8
Invest in unconsol affiliates 21.0 21.0 18.8 25.8 6.4
Cash and invested cash 1144.8 3794.7 2433.4 1895.9 1927.4
Property and equipment 196.0 189.8 174.8 203.8 228.2
Premiums and fees receivable 237.3 197.5 246.2 259.6 296.7
Accrued investment income 417.6 423.0 528.5 533.2 546.4
Assets held in separate accounts 28809.1 37138.8 43408.9 53654.2 50579.9
Federal income taxes recoverable 204.1 345.0 200.1
Amounts recoverable from reinsurers 2328.5 2350.8 3127.1 3954.3 3747.7
Deferred acquisition costs 1689.7 1623.8 1964.4 2800.3 3070.5
Other intangible assets 708.4 613.9 1848.4 1746.5 1557.0
Goodwill 351.7 457.7 1484.3 1423.0 1286.0
Other 596.4 544.8 468.0 675.7 1021.6
Discontinued operations - assets 5482.7
-------- -------- -------- -------- --------
Total Assets 71713.4 77174.7 93836.3 103095.7 99857.8
======== ======== ======== ======== ========
LIABILITIES and SHAREHOLDERS' EQUITY
Liabilities
Insurance and Inv Contract Liabilities:
Life and annuity reserves 7812.4 8228.7 16434.2 17071.4 17841.2
Health reserves 2153.0 2300.4 2600.1 2507.8 2523.8
Unpaid claims-life and health 438.8 682.0 1043.4 1269.8 1316.6
Unearned premiums 53.7 55.3 62.3 75.8 46.5
Premium deposit funds 20894.6 19803.0 20171.9 19624.1 17715.5
Participating policyholders' funds 81.9 79.8 142.7 132.0 139.4
Other policyholders' funds 188.9 180.6 438.4 472.6 522.2
Liab related to separate accounts 28809.1 37138.8 43408.9 53654.2 50579.9
-------- -------- -------- -------- --------
Total Ins and Inv Contr Liabilities 60432.4 68468.5 84301.9 94807.7 90685.1
Federal income taxes 161.5 487.8
Short-term debt 189.0 297.2 314.6 460.2 312.9
Long-term debt 626.3 511.0 712.2 712.0 712.2
Minority Interest - pref sec of a sub 315.0 315.0 745.0 745.0 745.0
Other liabilities 1417.4 2112.2 2374.6 2107.0 2434.7
Discontinued operations - liabilities 4101.9
-------- -------- -------- -------- --------
Total Liabilities 67243.5 72191.8 88448.3 98831.9 94890.0
-------- -------- -------- -------- --------
S/Hs' equity-unrealized gains-cont op. 276.4 436.0 552.4 (465.7) 25.8
S/Hs' equity-unrealized gains-disc op. 136.4
S/Hs' equity-foreign currency 62.7 39.6 43.4 23.5 15.4
S/Hs' equity-other 3994.4 4507.3 4792.2 4706.1 4926.7
-------- -------- -------- -------- --------
Total Shareholders' Equity 4470.0 4982.9 5387.9 4263.9 4967.9
-------- -------- -------- -------- --------
Total Liabilities
and Shareholders' Equity 71713.4 77174.7 93836.3 103095.7 99857.8
======== ======== ======== ======== ========
Shareholders' Equity Per Share
[Book Value, Securities at Cost] $19.51 $22.48 $23.86 $24.14 $25.85
Common shares outstanding 207.9 202.3 202.6 196.0 191.2
Quarterly Balance Sheet
Unaudited [Millions of Dollars except Common Share Data]
Mar Jun Sep Dec Mar Jun
1998 1998 1998 1998 1999 1999
------- -------- -------- -------- -------- -------
ASSETS
Investments
Corporate bonds 19447.1 20034.2 20986.1 22505.2 22450.1 21888.5
U.S. government bonds 764.9 812.3 968.1 1134.6 1489.4 1367.8
Foreign government bonds 1897.9 1681.4 1519.2 1321.2 1373.7 1339.7
Mortgage backed securities 5069.2 4908.3 4857.6 5080.5 5068.6 4788.5
State and municipal bonds 163.4 162.8 62.9 16.7 16.2 19.1
Preferred stocks - redeemable 190.2 188.0 160.0 174.6 179.8 175.8
Common stocks 732.8 567.6 424.4 463.1 399.5 419.0
Preferred stocks-equity 91.9 81.3 80.5 79.8 81.3 86.7
Mortgage loans 4556.6 4434.9 4329.3 4393.1 4344.6 4570.5
Real estate 567.7 499.0 459.6 488.7 471.8 449.8
Policy loans 1404.8 1499.6 1517.1 1840.0 1842.4 1847.4
Other long-term investments 343.5 402.6 399.1 432.0 411.9 409.9
------- -------- -------- -------- -------- -------
Total Investments 35230.0 35271.8 35763.9 37929.5 38129.4 37362.6
Invest in unconsol affiliates 22.5 23.1 17.4 18.8 20.5 22.3
Cash and invested cash 2641.7 2414.1 2725.4 2433.4 2327.0 2151.1
Property and equipment 191.0 191.7 200.9 174.8 178.0 180.7
Premiums and fees receivable 204.6 250.8 241.6 246.2 241.8 269.0
Accrued investment income 516.8 508.0 547.2 528.5 585.6 569.1
Assets held in separate accounts 41741.3 42247.2 37559.0 43408.9 44339.4 47864.3
Federal income taxes recoverable 78.5 188.9 0 204.1 286.0 478.4
Amount recoverable from reinsurers 2290.3 2373.5 2454.5 3127.1 3124.5 3121.3
Deferred acquisition costs 1695.7 1749.3 1848.0 1964.4 2112.2 2398.3
Other intangible assets 1536.6 1255.0 1241.8 1848.4 1845.4 1764.9
Goodwill 1049.3 1168.7 1153.1 1484.3 1404.6 1428.3
Other 686.3 722.5 853.5 468.0 755.8 651.1
------- -------- -------- -------- -------- -------
Total Assets 87884.5 88364.6 84606.2 93836.3 95350.3 98261.4
======= ======== ======== ======== ======== =======
ASSETS (Continued)
Sep Dec Mar Jun Sep Dec
1999 1999 2000 2000 2000 2000
------- -------- -------- -------- -------- -------
Investments
Corporate bonds 21560.5 21119.5 21188.0 20719.1 21064.7 21249.7
U.S. government bonds 991.0 538.3 572.4 566.2 575.5 542.9
Foreign government bonds 1369.6 1447.5 1416.4 1377.4 1277.7 1321.1
Mortgage backed securities 4601.2 4404.0 4393.4 4242.4 4172.5 4160.4
State and municipal bonds 14.8 14.7 14.7 14.1 14.3 14.6
Preferred stocks - redeemable 171.3 164.7 159.7 159.2 159.5 161.2
Common stocks 423.9 514.5 496.4 467.8 479.9 457.8
Preferred stocks-equity 82.7 89.5 91.3 92.2 90.3 113.1
Mortgage loans 4772.7 4735.4 4833.9 4783.8 4767.3 4663.0
Real estate 280.3 256.2 283.4 282.1 297.6 282.0
Policy loans 1863.2 1892.4 1896.3 1914.7 1935.6 1960.9
Other long-term investments 401.2 401.8 428.8 438.2 470.5 463.3
------- -------- -------- -------- -------- -------
Total Investments 36532.4 35578.4 35774.6 35057.2 35305.4 35389.8
Invest in unconsol affiliates 23.4 25.8 (0.9) 5.8 6.4
Cash and invested cash 2342.9 1895.9 1510.1 1619.3 1435.9 1927.4
Property and equipment 191.9 203.8 207.7 205.5 213.8 228.2
Premiums and fees receivable 296.0 259.6 190.2 247.8 240.8 296.7
Accrued investment income 602.9 533.2 575.0 544.0 569.2 546.4
Assets held in separate accounts 46228.8 53654.2 56907.6 54924.2 54410.9 50579.9
Federal income taxes recoverable 457.3 345.0 300.4 246.1 267.3 200.1
Amount recoverable from reinsurers 3315.6 3954.3 3851.0 3775.3 3774.7 3747.7
Deferred acquisition costs 2614.5 2800.3 2870.4 2968.0 3048.0 3070.5
Other intangible assets 1760.6 1746.5 1705.5 1646.7 1598.4 1557.0
Goodwill 1435.0 1423.0 1349.6 1335.4 1296.6 1286.0
Other 699.3 675.7 1097.8 1279.1 1076.4 1021.6
------- -------- -------- -------- -------- -------
Total Assets 96500.7 103095.7 106340.0 103847.6 103243.1 99857.8
======= ======== ======== ======== ======== =======
LIABILITIES and SHAREHOLDERS' EQUITY
Mar Jun Sep Dec Mar Jun
1998 1998 1998 1998 1999 1999
------- -------- -------- -------- -------- -------
Liabilities
Insurance and Inv Contract Liabilities:
Life and annuity reserves 12709.8 14103.3 12993.8 16434.2 16590.3 16536.4
Health reserves 2481.9 2547.5 2435.4 2600.1 2562.3 2528.2
Unpaid claims-life and health 652.3 740.4 768.4 1043.4 1022.9 1064.9
Unearned premiums 55.2 61.3 66.0 62.3 68.8 68.7
Premium deposit funds 20715.0 19094.9 20210.3 20171.9 20027.8 20012.6
Participating policyholders' funds 83.3 74.8 86.3 142.7 132.6 125.7
Other policyholders' funds 235.8 233.8 235.7 438.4 440.4 441.2
Liab related to separate accounts 41741.3 42247.2 37559.0 43408.9 44339.4 47864.3
------- -------- -------- -------- -------- -------
Total Ins and Inv Contr Liabilities 78674.8 79103.1 74355.0 84301.9 85184.6 88642.1
Federal income taxes 3.0
Short-term debt 364.9 277.1 354.4 314.6 281.8 380.2
Long-term debt 811.7 811.8 712.0 712.2 712.1 712.1
Minority Interest - pref sec of a sub 315.0 315.0 745.0 745.0 745.0 745.0
Other liabilities 2663.9 2706.8 2909.2 2374.6 3319.3 2964.7
------- -------- -------- -------- -------- -------
Total Liabilities 82830.3 83213.8 79078.6 88448.3 90242.9 93444.1
------- -------- -------- -------- -------- -------
S/Hs' equity-unrealized gains-cont op. 475.0 469.5 773.7 552.4 254.6 (1.1)
S/Hs' equity-foreign currency 57.6 57.0 65.0 55.2 35.3 25.9
S/Hs' equity-other 4521.6 4624.3 4688.9 4780.4 4817.5 4792.6
------- -------- -------- -------- -------- -------
Total Shareholders' Equity 5054.2 5150.8 5527.6 5387.9 5107.4 4817.4
------- -------- -------- -------- -------- -------
Total Liabilities
and Shareholders' Equity 87884.5 88364.6 84606.2 93836.3 95350.3 98261.4
======= ======== ======== ======== ======== =======
Shareholders' Equity Per Share
[Book Value, Securities at Cost] $22.76 $23.22 $23.47 $23.86 $24.04 $24.18
Common shares outstanding 201.2 201.6 202.6 202.6 201.8 199.3
LIABILITIES and SHAREHOLDERS' EQUITY (Continued)
Sep Dec Mar Jun Sep Dec
1999 1999 2000 2000 2000 2000
------- -------- -------- -------- -------- -------
Liabilities
Insurance and Inv Contract Liabilities:
Life and annuity reserves 16760.5 17071.4 17172.1 17247.3 17500.0 17841.2
Health reserves 2511.3 2507.8 2547.4 2494.2 2520.2 2523.8
Unpaid claims-life and health 1162.6 1269.8 1177.3 1204.1 1202.8 1316.6
Unearned premiums 62.5 75.8 57.1 52.8 51.8 46.5
Premium deposit funds 19988.9 19624.1 18899.3 18407.2 18072.1 17715.5
Participating policyholders' funds 120.2 132.0 130.7 130.4 135.4 139.4
Other policyholders' funds 445.9 472.6 478.9 490.6 500.7 522.2
Liab related to separate accounts 46228.8 53654.2 56907.6 54924.2 54410.9 50579.9
------- -------- -------- -------- -------- -------
Total Ins and Inv Contr Liabilities 87280.8 94807.7 97370.5 94950.8 94394.0 90685.1
Federal income taxes
Short-term debt 367.7 460.2 474.2 355.7 330.3 312.9
Long-term debt 712.0 712.0 712.0 712.1 712.2 712.2
Minority Interest - pref sec of a sub 745.0 745.0 745.0 745.0 745.0 745.0
Other liabilities 2733.0 2107.0 2697.9 2860.3 2522.9 2434.7
------- -------- -------- -------- -------- -------
Total Liabilities 91838.5 98831.9 101999.6 99623.9 98704.5 94890.0
------- -------- -------- -------- -------- -------
S/Hs' equity-unrealized gains-cont op. (103.8) (465.7) (411.2) (556.6) (337.7) 25.8
S/Hs' equity-foreign currency 45.4 35.2 28.0 27.1 25.1 27.1
S/Hs' equity-other 4720.5 4694.3 4723.6 4753.2 4851.2 4914.9
------- -------- -------- -------- -------- -------
Total Shareholders' Equity 4662.2 4263.9 4340.4 4223.7 4538.6 4967.9
------- -------- -------- -------- -------- -------
Total Liabilities
and Shareholders' Equity 96500.7 103095.7 106340.0 103847.6 103243.1 99857.8
======= ======== ======== ======== ======== =======
Shareholders' Equity Per Share
[Book Value, Securities at Cost] $24.28 $24.14 $24.58 $25.01 $25.43 $25.85
Common shares outstanding 196.3 196.0 193.3 191.1 191.8 191.2
Life Insurance Segment
Income Statements & Operational Data
Unaudited [Millions of Dollars]
1996 1997 1998 1999 2000
----- ----- ------ ------ ------
Operating Revenue
Premiums 63.1 65.8 186.5 236.2 227.4
Surrender charges 14.6 13.1 55.2 69.1 69.8
Mortality assessments 159.7 161.2 350.1 444.6 465.2
Expense assessments 27.3 28.9 146.3 165.9 191.8
Other revenue and fees 18.0 11.3 3.9 16.3 15.8
Net investment income 456.1 453.3 818.6 1016.0 1042.3
------ ------ ------- ------- -------
Operating Revenue 738.9 733.6 1560.6 1948.2 2012.4
------ ------ ------- ------- -------
Benefits and Expenses
Benefits paid or provided:
Benefits 137.3 144.9 372.0 431.0 411.7
Div accum & div to policyholders 24.1 20.4 70.7 81.5 80.8
Interest credited to policy bal. 278.4 270.6 499.9 599.1 630.0
Underwriting, acquisition,
insurance and other expenses 195.6 202.8 319.0 441.3 418.5
Goodwill amortization 0.1 0.1 19.7 23.4 23.7
Interest expense 0.0 0.0 0.1 0.1 0.0
------ ------ ------- ------- -------
Total Benefits & Expenses 635.5 638.8 1281.3 1576.4 1564.7
----- ----- ------ ------ ------
Income from Operations Before Tax 103.4 94.8 279.3 371.8 447.7
Federal income taxes 33.7 27.0 99.0 135.2 161.8
------ ------ ------- ------- -------
Income from Operations 69.7 67.7 180.4 236.6 285.9
Realized gain on investments 16.3 6.1 (2.2) (1.0) (11.6)
Restructuring charges (20.0) 0.0
------ ------ ------- ------- -------
Net Income 86.1 73.9 158.1 235.6 274.3
====== ====== ======= ======= =======
Effective tax rate 32.6% 28.5% 35.4% 36.4% 36.1%
Operating Revenue 738.9 733.6 1,560.6 1948.2 2012.4
Realized gains on investments 30.7 14.1 (1.8) (2.9) (18.8)
------ ------ ------- ------- -------
Total Revenue 769.6 747.8 1,558.9 1945.3 1993.6
====== ====== ======= ======= =======
Average capital 636.8 618.2 2141.8 2919.1 2806.3
Return on average capital 11.0% 11.0% 8.4% 8.1% 10.2%
First Year Premiums by Product (Billions)
- ------------------------------------------
Lincoln Life
Universal Life 0.225 0.190
Variable Universal Life 0.129 0.209
Whole Life 0.024 0.022
Term 0.004 0.003
------ ------ ------- ------- -------
Subtotal 0.381 0.423
Corporate Owned Life Insurance (COLI) 0.015 0.087
------ ------ ------- ------- -------
Total Lincoln Life 0.082 0.071 0.238 0.396 0.510
------ ------ ------- ------- -------
First Penn-Pacific
Universal Life 0.114 0.094
Term 0.047 0.045
------ ------ ------- ------- -------
Total First Penn-Pacific 0.134 0.154 0.160 0.139
------ ------ ------- ------- -------
Total Segment by Product 0.216 0.205 0.391 0.556 0.649
====== ====== ======= ======= =======
First Year Premiums by Distribution (Billions)
- ----------------------------------------------
Lincoln Life
Lincoln Financial Advisors 0.181 0.195
Lincoln Financial Distributors 0.215 0.316
------ ------ ------- ------- -------
Lincoln Life by Distribution 0.082 0.071 0.238 0.396 0.510
====== ====== ======= ======= =======
Individual Life Insurance In-Force (Billions)
- ---------------------------------------------
Universal Life & Other 32.876 32.827 105.837 109.288 115.872
Term Insurance 16.284 30.337 67.076 85.701 100.130
------ ------ ------- ------- -------
Total Life Segment In-Force 49.160 63.164 172.914 194.988 216.002
====== ====== ======= ======= =======
Life Insurance Segment
Income Statements & Operational Data
Unaudited [Millions of Dollars]
For the Quarter Ended Mar Jun Sep Dec Mar Jun
1998 1998 1998 1998 1999 1999
------- ------- ------- ------- ------- -------
Operating Revenue
Premiums 32.6 32.7 41.0 80.2 54.5 58.2
Surrender charges 12.9 12.4 11.8 18.1 15.4 17.2
Mortality assessments 82.6 85.3 60.4 121.8 108.8 111.4
Expense assessments 29.1 29.9 36.5 50.8 39.6 35.5
Other revenue and fees 5.6 (4.5) 0.1 2.8 2.0 1.7
Net investment income 184.8 194.5 188.7 250.6 252.4 252.2
------- ------- ------- ------- ------- -------
Operating Revenue 347.6 350.2 338.5 524.3 472.7 476.1
------- ------- ------- ------- ------- -------
Benefits and Expenses
Benefits paid or provided:
Benefits 77.1 87.7 72.2 135.0 103.6 109.0
Div accum & div to policyholders 17.8 8.3 18.4 26.3 20.3 21.0
Interest credited to policy bal. 132.5 118.3 101.0 148.1 151.6 149.2
Underwriting, acquisition,
insurance and other expenses 70.1 61.5 75.4 112.1 105.5 98.7
Goodwill amortization 1.2 7.4 4.0 7.1 5.9 5.0
------- ------- ------- ------- ------- -------
Total Benefits & Expenses 298.6 283.1 271.0 428.6 386.9 383.0
------- ------- ------- ------- ------- -------
Income from Operations Before Tax 49.0 67.1 67.5 95.8 85.8 93.1
Federal income taxes 16.8 22.8 23.0 36.4 31.3 34.3
------- ------- ------- ------- ------- -------
Income from Operations 32.2 44.3 44.5 59.3 54.5 58.8
Realized gain on investments 1.8 5.4 (3.2) (6.2) (2.0) (2.4)
Restructuring charges (20.0)
------- ------- ------- ------- ------- -------
Net Income 14.0 49.7 41.3 53.1 52.6 56.4
======= ======= ======= ======= ======= =======
Effective tax rate 34.3% 33.9% 34.0% 38.0% 36.5% 36.9%
Operating Revenue 347.6 350.2 338.5 524.3 472.7 476.1
Realized gains on investments 3.2 9.0 (4.1) (9.9) (3.6) (3.7)
------- ------- ------- ------- ------- -------
Total Revenue 350.8 359.2 334.4 514.4 469.1 472.5
======= ======= ======= ======= ======= =======
Average capital 1754.7 2012.4 2078.0 2722.2 2931.6 2959.1
Return on average capital 7.3% 8.8% 8.6% 8.7% 7.4% 7.9%
Life Insurance Segment
Income Statements & Operational Data
Unaudited [Millions of Dollars]
For the Quarter Ended Sep Dec Mar Jun Sep Dec
1999 1999 2000 2000 2000 2000
------- ------- ------- ------- ------- -------
Operating Revenue
Premiums 52.4 71.1 53.0 56.4 50.9 67.2
Surrender charges 17.9 18.7 17.1 17.3 14.7 20.6
Mortality assessments 110.5 113.9 112.2 114.5 116.3 122.1
Expense assessments 42.8 48.0 45.3 44.1 47.0 55.5
Other revenue and fees 8.5 4.0 3.8 3.3 4.1 4.7
Net investment income 253.1 258.4 259.5 258.5 263.8 260.4
------- ------- ------- ------- ------- -------
Operating Revenue 485.2 514.2 490.8 494.2 496.9 530.5
------- ------- ------- ------- ------- -------
Benefits and Expenses
Benefits paid or provided:
Benefits 105.5 112.9 98.4 96.4 95.8 121.1
Div accum & div to policyholders 19.2 21.0 20.4 18.7 16.4 25.3
Interest credited to policy bal. 148.9 149.4 152.8 155.4 160.1 161.7
Underwriting, acquisition,
insurance and other expenses 110.9 126.3 107.7 108.9 104.7 97.2
Goodwill amortization 6.4 6.0 5.9 5.9 5.9 5.9
------- ------- ------- ------- ------- -------
Total Benefits & Expenses 390.9 415.6 385.3 385.3 383.0 411.2
------- ------- ------- ------- ------- -------
Income from Operations Before Tax 94.3 98.5 105.6 108.9 113.9 119.4
Federal income taxes 33.7 35.9 38.5 39.9 41.7 41.8
------- ------- ------- ------- ------- -------
Income from Operations 60.6 62.6 67.1 69.0 72.2 77.6
Realized gain on investments 1.3 2.2 (2.7) (3.9) 0.4 (5.4)
Restructuring charges
------- ------- ------- ------- ------- -------
Net Income 61.9 64.8 64.4 65.1 72.6 72.2
======= ======= ======= ======= ======= =======
Effective tax rate 35.7% 36.4% 36.4% 36.6% 36.6% 35.0%
Operating Revenue 485.2 514.2 490.8 494.2 496.9 530.5
Realized gains on investments 1.9 2.5 (4.4) (6.1) (0.0) (8.3)
------- ------- ------- ------- ------- -------
Total Revenue 487.1 516.6 486.4 488.1 496.8 522.2
======= ======= ======= ======= ======= =======
Average capital 2893.7 2891.9 2772.4 2796.0 2831.8 2824.8
Return on average capital 8.4% 8.7% 9.7% 9.9% 10.2% 11.0%
- ------------------------------------------------------------------------------------------------------------
For the Quarter Ended Mar Jun Sep Dec Mar Jun
1998 1998 1998 1998 1999 1999
------- ------- ------- ------- ------- -------
First Year Premiums by Product (Billions)
Lincoln Life
Universal Life 0.043 0.051
Variable Universal Life 0.027 0.024
Whole Life 0.004 0.005
Term 0.000 0.001
------- ------- ------- ------- ------- -------
Subtotal 0.075 0.081
Corporate Owned Life Insurance (COLI) 0.002 0.007
------- ------- ------- ------- ------- -------
Total Lincoln Life 0.040 0.049 0.044 0.103 0.077 0.088
------- ------- ------- ------- ------- -------
First Penn-Pacific
Universal Life 0.029 0.029
Term 0.013 0.012
------- ------- ------- ------- ------- -------
Total First Penn-Pacific 0.031 0.039 0.040 0.043 0.042 0.040
------- ------- ------- ------- ------- -------
Total Segment by Product 0.072 0.088 0.084 0.147 0.119 0.128
======= ======= ======= ======= ======= =======
First Year Premiums by Distribution (Billions)
Lincoln Life
Lincoln Financial Advisors 0.039 0.033
Lincoln Financial Distributors 0.038 0.055
------- ------- ------- ------- ------- -------
Lincoln Life by Distribution 0.040 0.049 0.044 0.103 0.077 0.088
======= ======= ======= ======= ======= =======
Individual Insurance In-Force (Billions)
Universal Life & Other 68.799 69.249 69.785 105.837 105.090 106.047
Term Insurance 39.985 45.944 52.057 67.076 73.452 78.431
------- ------- ------- ------- ------- -------
Total Segment In-Force 108.784 115.193 121.842 172.914 178.542 184.478
======= ======= ======= ======= ======= =======
For the Quarter Ended Sep Dec Mar Jun Sep Dec
1999 1999 2000 2000 2000 2000
------- ------- ------- ------- ------- -------
First Year Premiums by Product (Billions)
Lincoln Life
Universal Life 0.044 0.086 0.046 0.042 0.047 0.056
Variable Universal Life 0.027 0.052 0.042 0.043 0.052 0.072
Whole Life 0.006 0.008 0.004 0.005 0.006 0.008
Term 0.001 0.001 0.001 0.001 0.000 0.001
Subtotal 0.078 0.147 0.093 0.089 0.105 0.137
------- ------- ------- ------- ------- -------
Corporate Owned Life Insurance (COLI) 0.002 0.004 0.013 0.019 0.006 0.049
------- ------- ------- ------- ------- -------
Total Lincoln Life 0.081 0.151 0.105 0.109 0.111 0.186
------- ------- ------- ------- ------- -------
First Penn-Pacific
Universal Life 0.030 0.026 0.026 0.021 0.024 0.023
Term 0.011 0.011 0.013 0.013 0.010 0.009
------- ------- ------- ------- ------- -------
Total First Penn-Pacific 0.041 0.037 0.039 0.034 0.035 0.032
------- ------- ------- ------- ------- -------
Total Segment by Product 0.121 0.188 0.144 0.142 0.145 0.218
======= ======= ======= ======= ======= =======
First Year Premiums by Distribution (Billions)
Lincoln Life
Lincoln Financial Advisors 0.038 0.071 0.044 0.035 0.050 0.065
Lincoln Financial Distributors 0.043 0.080 0.061 0.073 0.061 0.121
------- ------- ------- ------- ------- -------
Lincoln Life by Distribution 0.081 0.151 0.105 0.109 0.111 0.186
======= ======= ======= ======= ======= =======
Individual Insurance In-Force (Billions)
Universal Life & Other 106.945 109.288 108.817 110.448 112.884 115.872
Term Insurance 81.963 85.701 92.857 97.039 98.424 100.130
------- ------- ------- ------- ------- -------
Total Segment In-Force 188.908 194.988 201.674 207.487 211.308 216.002
======= ======= ======= ======= ======= =======
Life Insurance Segment
Life Insurance Account Values
Unaudited [Billions of Dollars]
1996 1997 1998 1999 2000
---------- ---------- --------- --------- ---------
Lincoln Life
- ------------
Universal Life-Beg of Year 1.591 1.618 1.557 5.169 5.457
Deposits 0.165 0.141 0.531 0.864 0.823
Withdrawals & deaths (0.234) (0.295) (0.586) (0.391) (0.352)
---------- ---------- --------- --------- ---------
Net cash flows (0.069) (0.154) (0.055) 0.473 0.471
Policyholder assessments (0.488) (0.523)
Interest credited 0.097 0.093 0.289 0.304 0.310
Acq of new business/companies 0.000 0.000 3.378 0.000 0.000
---------- ---------- --------- --------- ---------
Universal Life-End of Year (1) 1.618 1.557 5.169 5.457 5.716
---------- ---------- --------- --------- ---------
Variable Universal Life-Beg of Year 0.239 0.339 0.480 1.200 1.605
Deposits 0.095 0.106 0.193 0.326 0.607
Withdrawals & deaths (0.030) (0.040) (0.100) (0.099) (0.132)
---------- ---------- --------- --------- ---------
Net cash flows 0.065 0.065 0.093 0.228 0.475
Policyholder assessments (0.084) (0.141)
Invest inc & chg in mkt value 0.035 0.076 0.105 0.370 (0.130)
Acq of new business/transfers between segments 0.000 0.000 0.522 (0.110) 0.000
---------- ---------- --------- --------- ---------
Variable Universal Life-End of Year 0.339 0.480 1.200 1.605 1.808
---------- ---------- --------- --------- ---------
Interest Sensitive Whole Life-Beg of Year 1.784 1.963
Deposits 0.340 0.355 0.322
Withdrawals & deaths (0.294) (0.162) (0.168)
---------- ---------- --------- --------- ---------
Net cash flows 0.046 0.193 0.154
Policyholder assessments (0.168) (0.168)
Interest credited 0.096 0.109 0.113
Acq of new business/companies 1.642 0.045
---------- ---------- --------- --------- ---------
Int Sensitive Whole Life-End of Year 1.784 1.963 2.062
---------- ---------- --------- --------- ---------
Total Lincoln Life-Beg of Year 1.830 1.957 2.037 8.153 9.025
Deposits 0.260 0.247 1.064 1.546 1.753
Withdrawals & deaths (0.264) (0.336) (0.979) (0.652) (0.653)
---------- ---------- --------- --------- ---------
Net cash flows (0.004) (0.089) 0.084 0.894 1.100
Policyholder assessments (0.739) (0.831)
Invest inc & chg in mkt value 0.132 0.168 0.490 0.782 0.293
Acq of new business/transfers between segments 5.542 (0.065)
---------- ---------- --------- --------- ---------
Total Lincoln Life-End of Year 1.957 2.037 8.153 9.025 9.586
---------- ---------- --------- --------- ---------
VUL Under Agree-included above 0.631 0.704 0.609
- ----------------------------------------------------------------------------------------------------------------
First Penn-Pacific (FPP)
- ------------------------
Universal Life-Beg of Year 0.800 0.911 1.001 1.090 1.192
Deposits 0.145 0.137 0.144 0.152 0.132
Withdrawals & deaths (0.085) (0.104) (0.116) (0.061) (0.074)
---------- ---------- --------- --------- ---------
Net cash flows 0.060 0.033 0.028 0.091 0.058
Policyholder assessments (0.056) (0.061)
Interest credited 0.051 0.056 0.061 0.067 0.072
---------- ---------- --------- --------- ---------
FPP Universal Life-End of Year 0.911 1.001 1.090 1.192 1.260
---------- ---------- --------- --------- ---------
- ----------------------------------------------------------------------------------------------------------------
Total Segment-Life Insurance Account Values
- -------------------------------------------
Beg of Year 2.629 2.869 3.038 9.243 10.217
Deposits 0.405 0.384 1.207 1.698 1.884
Withdrawals & deaths (0.349) (0.439) (1.095) (0.713) (0.727)
---------- ---------- --------- --------- ---------
Net cash flows 0.056 (0.056) 0.113 0.985 1.158
Policyholder assessments (0.795) (0.893)
Invest inc & change in market value 0.183 0.225 0.551 0.849 0.364
Acq(sale) of new business/companies 5.542 (0.065)
---------- ---------- --------- --------- ---------
Total Segment-End of Year 2.869 3.038 9.243 10.217 10.847
========== ========== ========= ========= ========
- ----------------------------------------------------------------------------------------------------------------
Life Insurance Segment
Annuity Account Values
Unaudited [Billions of Dollars]
1996 1997 1998 1999 2000
---------- ---------- --------- --------- --------
First Penn-Pacific Fixed Annuities
- ----------------------------------
Beg of Year 4.177 4.148 3.879 3.626 3.446
Deposits 0.164 0.076 0.187 0.291 0.171
Withdrawals (incl charges) & deaths (0.416) (0.557) (0.635) (0.653) (0.754)
---------- ---------- --------- --------- ---------
Net cash flows (0.252) (0.481) (0.448) (0.362) (0.583)
Interest credited 0.223 0.213 0.194 0.182 0.171
---------- ---------- --------- --------- ---------
Fixed Annuities-Gross 4.148 3.879 3.626 3.446 3.033
Reinsurance Ceded (1.816) (1.757) (1.606) (1.419) (1.173)
---------- ---------- --------- --------- ---------
End of Year (Net of Ceded) 2.332 2.123 2.020 2.027 1.860
========== ========== ========= ========= ========
(1) Includes fixed investment option of VUL products.
Life Insurance Segment
Life Insurance Account Values
Unaudited [Billions of Dollars]
For the Quarter Ended Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
1998 1998 1998 1998 1999 1999 1999 1999 2000 2000 2000 2000
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Lincoln Life
- -------------
Universal Life - Beg of
Quarter 1.557 2.984 3.015 3.089 5.169 5.258 5.295 5.352 5.457 5.521 5.557 5.633
Deposits 0.096 0.115 0.097 0.223 0.195 0.200 0.199 0.271 0.216 0.182 0.192 0.232
Withdrawals & deaths (0.152) (0.130) (0.066) (0.238) (0.052) (0.134) (0.094) (0.111) (0.099) (0.095) (0.065) (0.094)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net cash flows (0.056) (0.015) 0.031 (0.015) 0.143 0.066 0.105 0.160 0.118 0.087 0.127 0.138
Policyholder assessments (0.117) (0.119) (0.122) (0.130) (0.130) (0.128) (0.130) (0.134)
Interest credited 0.046 0.046 0.043 0.153 0.063 0.090 0.074 0.076 0.076 0.077 0.078 0.079
Acq of new business/
companies 1.437 (0.000) 1.941 0.000
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Universal Life - End of
Quarter (1) 2.984 3.015 3.089 5.169 5.258 5.295 5.352 5.457 5.521 5.557 5.633 5.716
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Variable Universal
Life - Beg of Quarter 0.480 0.576 0.608 0.561 1.200 1.177 1.298 1.285 1.605 1.771 1.764 1.812
Deposits 0.028 0.035 0.035 0.095 0.077 0.068 0.074 0.107 0.112 0.128 0.123 0.245
Withdrawals & deaths (0.012) (0.013) (0.013) (0.063) (0.011) (0.013) (0.049) (0.025) (0.019) (0.028) (0.037) (0.048)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net cash flows 0.017 0.022 0.022 0.032 0.066 0.055 0.025 0.082 0.093 0.100 0.085 0.197
Policyholder assessments (0.020) (0.020) (0.020) (0.024) (0.032) (0.033) (0.036) (0.041)
Invest inc & chg in mkt
value 0.061 0.010 (0.069) 0.103 0.040 0.087 (0.018) 0.262 0.105 (0.074) (0.001) (0.160)
Acq of new business/
transfers between segments 0.018 0.504 (0.110) 0.000 0.000
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Variable Universal Life -
End of Quarter 0.576 0.608 0.561 1.200 1.177 1.298 1.285 1.605 1.771 1.764 1.812 1.808
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Interest Sensitive Whole
Life - Beg of Quarter 1.695 1.730 1.729 1.784 1.865 1.895 1.922 1.963 1.970 1.993 2.026
Deposits 0.065 0.073 0.086 0.116 0.083 0.073 0.086 0.113 0.060 0.071 0.079 0.113
Withdrawals & deaths (0.033) (0.060) (0.116) (0.085) (0.039) (0.030) (0.044) (0.050) (0.042) (0.037) (0.033) (0.056)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net cash flows 0.032 0.013 (0.030) 0.031 0.044 0.044 0.043 0.062 0.018 0.034 0.045 0.057
Policyholder assessments (0.039) (0.039) (0.042) (0.048) (0.039) (0.040) (0.040) (0.050)
Interest credited 0.021 0.022 0.029 0.024 0.030 0.025 0.027 0.026 0.028 0.028 0.027 0.029
Acq of new business/
companies 1.642 0.045
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Int Sensitive Whole
Life - End of Quarter 1.695 1.730 1.729 1.784 1.865 1.895 1.922 1.963 1.970 1.993 2.026 2.062
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Lincoln Life - Beg
of Quarter 2.037 5.255 5.353 5.379 8.153 8.299 8.488 8.558 9.025 9.262 9.314 9.471
Deposits 0.189 0.223 0.217 0.434 0.355 0.341 0.359 0.491 0.388 0.381 0.394 0.590
Withdrawals & deaths (0.197) (0.203) (0.195) (0.386) (0.102) (0.177) (0.187) (0.186) (0.160) (0.160) (0.136) (0.198)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net cash flows (0.007) 0.020 0.023 0.049 0.253 0.164 0.172 0.305 0.229 0.221 0.258 0.392
Policyholder assessments (0.175) (0.178) (0.184) (0.202) (0.200) (0.200) (0.206) (0.225)
Invest inc & chg in mkt
value 0.129 0.078 0.004 0.280 0.133 0.202 0.083 0.364 0.209 0.031 0.105 (0.052)
Acq of new business/
transfers between segments 3.097 (0.000) 2.445 (0.065)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Lincoln Life -
End of Quarter 5.255 5.353 5.379 8.153 8.299 8.488 8.558 9.025 9.262 9.314 9.471 9.586
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
VUL Under Agree - included
above 0.027 0.040 0.044 0.631 0.699 0.770 0.681 0.704 0.743 0.707 0.698 0.609
- -----------------------------------------------------------------------------------------------------------------------------------
First Penn-Pacific (FPP)
- ------------------------
Universal Life - Beg of
Quarter 1.001 1.021 1.041 1.064 1.090 1.117 1.140 1.167 1.192 1.208 1.224 1.246
Deposits 0.031 0.036 0.037 0.040 0.039 0.038 0.040 0.035 0.035 0.030 0.034 0.032
Withdrawals & deaths (0.025) (0.031) (0.030) (0.030) (0.015) (0.018) (0.015) (0.013) (0.022) (0.016) (0.015) (0.020)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net cash flows 0.005 0.005 0.007 0.011 0.024 0.021 0.025 0.022 0.013 0.014 0.019 0.012
Policyholder assessments (0.014) (0.014) (0.014) (0.014) (0.015) (0.015) (0.015) (0.016)
Interest credited 0.015 0.015 0.015 0.016 0.016 0.016 0.017 0.017 0.018 0.018 0.018 0.018
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
FPP Universal Life - End
of Quarter 1.021 1.041 1.064 1.090 1.117 1.140 1.167 1.192 1.208 1.224 1.246 1.260
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
- ---------------------------------------------------------------------------------------------------------------------------------
Total Segment - Life
- --------------------
Insurance Account Values
- ------------------------
Beg of Quarter 3.038 6.276 6.394 6.443 9.243 9.416 9.628 9.726 10.217 10.470 10.538 10.716
Deposits 0.220 0.259 0.254 0.475 0.394 0.379 0.399 0.526 0.424 0.411 0.428 0.622
Withdrawals & deaths (0.222) (0.233) (0.224) (0.415) (0.117) (0.195) (0.202) (0.199) (0.182) (0.176) (0.151) (0.218)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net cash flows (0.002) 0.025 0.030 0.060 0.277 0.185 0.197 0.327 0.242 0.235 0.277 0.404
Policyholder assessments (0.189) (0.192) (0.198) (0.216) (0.215) (0.216) (0.221) (0.241)
Invest inc & change in
market value 0.143 0.093 0.019 0.295 0.149 0.219 0.100 0.381 0.227 0.048 0.123 (0.033)
Acq(sale) of new
business/companies 3.097 (0.000) 0.000 2.445 (0.065) 0.000 0.000 0.000 0.000 0.000 0.000 0.000
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Segment - End of
Quarter 6.276 6.394 6.443 9.243 9.416 9.628 9.726 10.217 10.470 10.538 10.716 10.847
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
- ---------------------------------------------------------------------------------------------------------------------------------
Life Insurance Segment
Annuity Account Values
Unaudited [Billions of Dollars]
For the Quarter Ended Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
1998 1998 1998 1998 1999 1999 1999 1999 2000 2000 2000 2000
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
First Penn-Pacific
- ------------------
Fixed Annuities
- ---------------
Beg of Quarter 3.879 3.814 3.736 3.667 3.626 3.594 3.553 3.493 3.446 3.367 3.246 3.148
Deposits 0.031 0.051 0.046 0.059 0.061 0.079 0.074 0.077 0.059 0.048 0.041 0.023
Withdrawals (incl charges)
& deaths (0.147) (0.177) (0.163) (0.148) (0.138) (0.166) (0.179) (0.170) (0.182) (0.212) (0.182) (0.178)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net cash flows (0.116) (0.127) (0.117) (0.088) (0.078) (0.087) (0.105) (0.092) (0.124) (0.165) (0.140) (0.155)
Interest credited 0.050 0.049 0.048 0.047 0.046 0.046 0.046 0.045 0.044 0.044 0.042 0.041
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Fixed Annuities - Gross 3.814 3.736 3.667 3.626 3.594 3.553 3.493 3.446 3.367 3.246 3.148 3.033
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Reinsurance Ceded (1.727) (1.687) (1.647) (1.606) (1.569) (1.524) (1.473) (1.419) (1.363) (1.291) (1.230) (1.173)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
End of Quarter (Net of
Ceded) 2.086 2.049 2.020 2.020 2.025 2.029 2.021 2.027 2.004 1.955 1.918 1.860
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
(1) Includes fixed investment option of VUL products.
Annuities Segment
Income Statements & Operational Data
Unaudited [Millions of Dollars]
Dec Dec Dec Dec Dec
For the Year Ended December 31 1996 1997 1998 1999 2000
------ ------ ------ ------ ------
Operating Revenue
Premiums 69.1 83.1 53.3 64.9 64.2
Surrender charges 22.1 26.5 30.4 35.0 38.4
Expense assessments 277.1 366.9 459.8 536.2 628.3
Other revenue and fees 0.5 0.1 1.1 8.4 9.7
Net investment income 1204.7 1305.8 1349.8 1325.4 1247.1
------ ------ ------ ------ ------
Operating Revenue 1573.7 1782.5 1894.3 1969.8 1987.7
------ ------ ------ ------ ------
Benefits and Expenses
Benefits paid or provided:
Benefits 269.3 291.2 270.9 258.6 254.5
Interest credited to policy bal. 783.8 856.8 848.4 819.9 761.5
Underwriting, acquisition,
insurance and other expenses 317.7 390.8 478.3 529.0 553.0
Goodwill amortization 0.0 0.0 2.2 2.0 (0.6)
------ ------ ------ ------ ------
Total Benefits & Expenses 1370.8 1538.9 1599.9 1609.5 1568.4
------ ------ ------ ------ ------
Income from Operations Before Tax 202.8 243.7 294.4 360.3 419.3
Federal income taxes 47.0 42.9 50.6 74.4 74.4
------ ------ ------ ------ ------
Income from Operations 155.8 200.7 243.8 285.8 344.9
Realized gain on investments 23.8 33.3 11.9 (7.4) (2.5)
Restructuring charges 0.0 0.0
------ ------ ------ ------ ------
Net Income 179.6 234.0 255.6 278.4 342.4
====== ====== ====== ====== ======
Effective tax rate 23.2% 17.6% 17.2% 20.7% 17.7%
Operating Revenue 1573.7 1782.5 1894.3 1969.8 1987.7
Realized gains on investments 36.5 52.6 18.3 (11.4) (3.8)
------ ------ ------ ------ ------
Total Revenue 1610.2 1835.1 1912.6 1958.4 1983.9
====== ====== ====== ====== ======
Average capital 1086.1 1139.8 1397.4 1352.7 1435.7
Return on average capital 14.3% 17.6% 17.4% 21.1% 24.0%
Annuities Segment
Income Statements & Operational Data
Unaudited [Millions of Dollars]
Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
1998 1998 1998 1998 1999 1999 1999 1999 2000 2000 2000 2000
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Operating Revenue
Premiums 14.5 11.9 10.6 16.3 14.9 15.9 13.1 21.0 13.3 16.7 18.0 16.2
Surrender charges 8.0 7.8 7.5 7.1 7.9 8.6 9.4 9.1 10.2 10.3 9.5 8.4
Expense assessments 112.3 119.3 115.6 112.6 119.8 133.3 142.6 140.5 155.0 155.7 163.3 154.2
Other revenue and fees (0.0) 0.1 (0.1) 1.1 2.6 1.9 (2.5) 6.3 2.1 0.9 4.4 2.3
Net investment income 341.0 338.7 334.5 335.6 336.5 332.6 327.5 328.8 325.8 309.8 312.1 299.4
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------
Operating Revenue 475.8 477.6 468.2 472.7 481.7 492.4 490.0 505.7 506.4 493.5 507.3 480.5
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------
Benefits and Expenses
Benefits paid or provided:
Benefits 66.3 68.6 67.2 68.8 61.9 64.6 55.0 77.2 61.6 65.7 68.3 59.0
Interest credited to policy
balances 221.8 209.8 209.3 207.4 202.3 206.7 204.0 206.9 201.6 192.7 179.2 188.0
Underwriting, acquisition,
insurance and other expenses 112.6 121.4 120.5 123.9 130.4 133.0 138.0 127.6 138.4 134.7 141.7 138.1
Goodwill amortization 2.2 (1.7) 0.5 1.1 0.5 0.4 0.6 0.5 (1.5) 0.3 0.3 0.3
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------
Total Benefits & Expenses 403.0 398.2 397.5 401.3 395.1 404.7 397.6 412.2 400.1 393.3 389.6 385.5
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------
Income from Operations
Before Tax 72.8 79.5 70.7 71.4 86.6 87.7 92.4 93.5 106.3 100.1 117.8 95.0
Federal income taxes 11.4 15.8 11.0 12.4 15.5 15.4 21.3 22.2 21.3 19.8 19.3 14.0
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------
Income from Operations 61.4 63.7 59.7 59.0 71.1 72.4 71.1 71.3 85.0 80.4 98.5 81.1
Realized gain on investments 5.7 11.5 (7.3) 1.9 2.5 (0.0) (6.8) (3.1) 3.1 0.1 (8.6) 2.9
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------
Net Income 67.1 75.2 52.4 60.9 73.6 72.3 64.3 68.1 88.1 80.5 89.9 83.9
======= ======= ======= ======= ======= ======= ======= ======= ======= ======= ======= ======
Effective tax rate 15.7% 19.9% 15.5% 17.4% 17.9% 17.5% 23.1% 23.8% 20.1% 19.7% 16.4% 14.7%
Operating Revenue 475.8 477.6 468.2 472.7 481.7 492.4 490.0 505.7 506.4 493.5 507.3 480.5
Realized gains on investments 10.4 16.2 (11.2) 2.9 3.9 (0.0) (10.5) (4.8) 4.7 0.2 (13.2) 4.4
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------
Total Revenue 486.1 493.8 457.0 475.7 485.6 492.3 479.5 500.9 511.1 493.7 494.1 484.9
======= ======= ======= ======= ======= ======= ======= ======= ======= ======= ======= ======
Average capital 1379.1 1394.5 1491.6 1324.5 1397.4 1379.9 1281.9 1351.5 1319.7 1466.0 1454.0 1502.9
Return on average capital 17.8% 18.3% 16.0% 17.8% 20.4% 21.0% 22.2% 21.1% 25.8% 21.9% 27.1% 21.6%
Annuities Segment
Annuity Account Values
Unaudited [Billions of Dollars]
1996 1997 1998 1999 2000
------ ------ ------ ------ ------
Fixed Annuities-Beg of Year 10.468 13.486 13.335 14.485 14.764
Gross Deposits 1.689 1.556 1.265 2.271 1.903
Withdrawals (incl charges) & deaths (1.500) (1.663) (1.833) (1.867) (2.529)
------ ------ ------ ------ ------
Net cash flows 0.189 (0.107) (0.568) 0.404 (0.626)
Transfer from (to) var annuities (0.688) (1.336) (0.356) (0.783) (1.329)
Interest credited 0.648 0.765 0.800 0.658 0.773
Acq of new business/companies 2.869 0.527 1.274
------ ------ ------ ------ ------
Fixed Annuities-End of Year 13.486 13.335 14.485 14.764 13.582
------ ------ ------ ------ ------
Fixed Annuities Incremental Deposits * 1.246 1.336 1.078 2.019 1.747
Variable Annuities-Beg of Year 15.673 20.383 27.346 33.358 41.493
Gross Deposits 2.746 2.695 2.791 2.553 3.165
Withdrawals (incl charges) & deaths (1.454) (2.038) (3.019) (3.760) (4.830)
------ ------ ------ ------ ------
Net cash flows 1.292 0.657 (0.228) (1.207) (1.665)
Transfer from (to) fixed annuities 0.689 1.335 0.389 0.787 1.320
Invest inc & change in mkt value 2.729 4.971 5.414 8.555 (1.721)
Acq(sale) of new business/companies 0.437
------ ------ ------ ------ ------
Var Annuities-End of Year 20.383 27.346 33.358 41.493 39.427
------ ------ ------ ------ ------
Variable Annuities Incremental Deposits * 2.626 2.585 2.641 2.409 2.667
Total Annuities -Beg of Year 26.141 33.869 40.681 47.843 56.257
Gross Deposits 4.434 4.251 4.056 4.825 5.068
Withdrawals (incl charges) & deaths (2.953) (3.701) (4.852) (5.628) (7.359)
------ ------ ------ ------ ------
Net cash flows 1.481 0.550 (0.796) (0.803) (2.291)
Transfers 0.001 (0.001) 0.033 0.004 (0.009)
Interest credited & change in mkt value 3.377 5.736 6.214 9.213 (0.948)
Acq of new business/companies 2.869 0.527 1.711
------ ------ ------ ------ ------
Total Annuities-End of Year 33.869 40.681 47.843 56.257 53.009
====== ====== ====== ====== ======
Total Annuities Incremental Deposits * 3.872 3.921 3.719 4.428 4.414
Var Ann Under Agree - Included above 0.649 0.719 0.941
- -----------------------------------------------------------------------------------------------------------------
Annuities Segment
Life Insurance Account Values
Unaudited [Billions of Dollars]
1996 1997 1998 1999 2000
------ ------ ------ ------ ------
Variable Life-Beg of Year 0.155
Deposits 0.017 0.014
Withdrawals (including charges) & deaths (0.006) (0.008)
------ ------ ------ ------ ------
Net cash flows (including charges) 0.011 0.006
Invest inc & chg in mkt value 0.034 (0.001)
Acq of new business/transfers between segments 0.110
------ ------ ------ ------ ------
Variable Life-End of Year 0.155 0.160
====== ====== ====== ====== ======
* Incremental Deposits represent gross deposits reduced by transfers from other Lincoln Annuity products.
Annuities Segment
Annuity Account Values
Unaudited [Billions of Dollars]
Mar Jun Sep Dec Mar Jun
1998 1998 1998 1998 1999 1999
------ ------ ------ ------ ------ ------
Fixed Annuities - Beg of Quarter 13.335 14.492 14.365 14.456 14.485 14.631
Gross Deposits 0.333 0.357 0.299 0.276 0.428 0.575
Withdrawals (incl charges) & deaths (0.425) (0.532) (0.415) (0.461) (0.440) (0.427)
------ ------ ------ ------ ------ ------
Net cash flows (0.092) (0.175) (0.116) (0.185) (0.012) 0.148
Transfer from (to) var annuities (0.223) (0.153) 0.009 0.011 (0.034) (0.211)
Interest credited 0.201 0.199 0.198 0.202 0.192 0.182
Acq of new business/companies 1.271 0.002 0.001
------ ------ ------ ------ ------ ------
Fixed Annuities - End of Quarter 14.492 14.365 14.456 14.485 14.631 14.750
------ ------ ------ ------ ------ ------
Fixed Annuities Incremental Deposits * 0.282 0.298 0.253 0.245 0.401 0.543
Variable Annuities - Beg of Quarter 27.346 32.933 33.458 29.476 33.358 34.148
Gross Deposits 0.701 0.810 0.647 0.633 0.635 0.651
Withdrawals (incl charges) & deaths (0.694) (0.760) (0.764) (0.801) (0.827) (0.912)
------ ------ ------ ------ ------ ------
Net cash flows 0.007 0.050 (0.117) (0.168) (0.192) (0.261)
Transfer from (to) fixed annuities 0.226 0.151 (0.016) 0.028 0.034 0.213
Invest inc & change in mkt value 3.534 0.324 (3.849) 5.405 0.948 3.133
Acq(sale) of new business/companies 1.820 (1.383)
------ ------ ------ ------ ------ ------
Var Annuities - End of Quarter 32.933 33.458 29.476 33.358 34.148 37.233
------ ------ ------ ------ ------ ------
Variable Annuities Incremental Deposits 0.673 0.768 0.615 0.585 0.606 0.622
Total Annuities - Beg of Quarter 40.681 47.425 47.823 43.932 47.843 48.779
Gross Deposits 1.034 1.167 0.946 0.909 1.064 1.226
Withdrawals (incl charges) & deaths (1.119) (1.292) (1.179) (1.262) (1.268) (1.339)
------ ------ ------ ------ ------ ------
Net cash flows (0.085) (0.125) (0.233) (0.353) (0.204) (0.113)
Transfers 0.003 (0.002) (0.007) 0.039 0.002
Interest credited & change in mkt value 3.735 0.523 (3.651) 5.607 1.140 3.315
Acq of new business/companies 3.091 0.002 (1.382)
------ ------ ------ ------ ------ ------
Total Annuities - End of Quarter 47.425 47.823 43.932 47.843 48.779 51.983
====== ====== ====== ====== ====== ======
Total Annuities Incremental Deposits * 0.955 1.066 0.868 0.830 1.007 1.165
Var Ann Under Agree - Included above 2.033 2.116 1.836 0.649 0.651 0.685
Annuities Segment
Annuity Account Values
Unaudited [Billions of Dollars]
(continued)
Sep Dec Mar Jun Sep Dec
1999 1999 2000 2000 2000 2000
------ ------ ------ ------ ------ ------
Fixed Annuities - Beg of Quarter 14.750 14.913 14.764 14.248 13.954 13.782
Gross Deposits 0.604 0.664 0.530 0.442 0.472 0.459
Withdrawals (incl charges) & deaths (0.388) (0.612) (0.693) (0.584) (0.620) (0.632)
------ ------ ------ ------ ------ ------
Net cash flows 0.216 0.052 (0.163) (0.142) (0.148) (0.173)
Transfer from (to) var annuities (0.238) (0.300) (0.550) (0.346) (0.217) (0.216)
Interest credited 0.185 0.099 0.197 0.194 0.193 0.189
Acq of new business/companies
------ ------ ------ ------ ------ ------
Fixed Annuities-End of Quarter 14.913 14.764 14.248 13.954 13.782 13.582
------ ------ ------ ------ ------ ------
Fixed Annuities Incremental Deposits * 0.570 0.505 0.501 0.399 0.423 0.424
Variable Annuities - Beg of Quarter 37.233 35.613 41.493 44.640 43.097 42.743
Gross Deposits 0.634 0.634 0.797 0.793 0.729 0.846
Withdrawals (incl charges) & deaths (0.938) (1.084) (1.210) (1.168) (1.253) (1.199)
------ ------ ------ ------ ------ ------
Net cash flows (0.304) (0.450) (0.413) (0.375) (0.524) (0.353)
Transfer from (to) fixed annuities 0.237 0.303 0.549 0.343 0.216 0.212
Invest inc & change in mkt value (1.553) 6.027 3.011 (1.511) (0.046) (3.175)
Acq(sale) of new business/companies
------ ------ ------ ------ ------ ------
Var Annuities - End of Quarter 35.613 41.493 44.640 43.097 42.743 39.427
------ ------ ------ ------ ------ ------
Variable Annuities Incremental Deposits 0.589 0.592 0.732 0.699 0.586 0.650
Total Annuities - Beg of Quarter 51.983 50.526 56.257 58.888 57.051 56.525
Gross Deposits 1.238 1.298 1.327 1.235 1.201 1.305
Withdrawals (incl charges) & deaths (1.326) (1.696) (1.903) (1.752) (1.873) (1.831)
------ ------ ------ ------ ------ ------
Net cash flows (0.088) (0.398) (0.576) (0.517) (0.672) (0.526)
Transfers (0.001) 0.003 (0.001) (0.003) (0.001) (0.004)
Interest credited & change in mkt value (1.368) 6.126 3.208 (1.317) 0.147 (2.986)
Acq of new business/companies
------ ------ ------ ------ ------ ------
Total Annuities - End of Quarter 50.526 56.257 58.888 57.051 56.525 53.009
====== ====== ====== ====== ====== ======
Total Annuities Incremental Deposits * 1.159 1.097 1.233 1.098 1.009 1.074
Var Ann Under Agree - Included above 0.639 0.719 0.866 0.868 0.962 0.941
- ---------------------------------------------------------------------------------------------------------------------
Annuities Segment
Life Insurance Account Values
Unaudited [Billions of Dollars]
Mar Jun Sep Dec Mar Jun
1998 1998 1998 1998 1999 1999
------ ------ ------ ------ ------ ------
Variable Life - Beg of Quarter
Deposits 0.003 0.005
Withdrawals (including charges) & deaths (0.002) 0.001
------ ------ ------ ------ ------ ------
Net cash flows (including charges) 0.002 0.005
Invest inc & chg in mkt value 0.004 0.010
Acq of new business/transfers
between segments 0.110
------ ------ ------ ------ ------ ------
Variable Life-End of Quarter 0.115 0.130
====== ====== ====== ====== ====== ======
Annuities Segment
Life Insurance Account Values
Unaudited [Billions of Dollars]
(continued)
Sep Dec Mar Jun Sep Dec
1999 1999 2000 2000 2000 2000
------ ------ ------ ------ ------ ------
Variable Life - Beg of Quarter 0.130 0.128 0.155 0.169 0.165 0.166
Deposits 0.004 0.005 0.003 0.003 0.004 0.004
Withdrawals (including charges) & deaths (0.004) (0.001) (0.003) (0.002) (0.003) (0.000)
------ ------ ------ ------ ------ ------
Net cash flows (including charges) 0.000 0.004 0.000 0.001 0.001 0.004
Invest inc & chg in mkt value (0.002) 0.022 0.014 (0.004) (0.001) (0.010)
Acq of new business/transfers
between segments
------ ------ ------ ------ ------ ------
Variable Life - End of Quarter 0.128 0.155 0.169 0.165 0.166 0.160
====== ====== ====== ====== ====== ======
* Incremental Deposits represent gross deposits reduced by transfers from other Lincoln Annuity products.
Lincoln UK
Income Statements & Operational Data
Unaudited [Millions of Dollars]
For the Year Ended December 31 1996 1997 1998 1999 2000
--------- --------- --------- --------- ---------
Operating Revenue
Premiums 131.8 145.4 156.6 145.1 148.4
Surrender charges
Mortality assessments 21.1 25.2 29.3 27.1 31.4
Expense assessments 153.4 166.1 153.6 182.3 178.1
Other revenue and fees 5.1 3.3 11.2 13.8 6.9
Net investment income 82.0 85.1 87.9 75.3 70.3
Equity earnings in unconsol affiliates
--------- --------- --------- --------- ---------
Operating Revenue 393.3 425.2 438.6 443.6 435.0
--------- --------- --------- --------- ---------
Benefits and Expenses
Benefits paid or provided:
Benefits 133.9 339.6 151.0 306.2 178.5
Underwriting, acquisition,
insurance and other expenses 157.7 184.5 175.6 223.5 180.0
Goodwill amortization 0.0 0.0 6.3 7.0 4.0
--------- --------- --------- --------- ---------
Total Benefits & Expenses 291.7 524.1 332.9 536.7 362.6
--------- --------- --------- --------- ---------
Income from Operations Before Tax 101.7 (99.0) 105.8 (93.1) 72.4
Federal income taxes 35.7 9.3 34.8 (79.2) 11.3
--------- --------- --------- --------- ---------
Income from Operations 66.0 (108.3) 70.9 (13.9) 61.0
--------- --------- --------- --------- ---------
Realized gain on investments 0.0 1.5 0.8 2.1 2.3
Restructuring charges (6.5) (76.5)
--------- --------- --------- --------- ---------
Net Income 66.0 (106.8) 71.7 (18.2) (13.2)
========= ========= ========= ========= =========
Effective tax rate 35.1% (9.4%) 32.9% 85.1% 15.7%
Operating Revenue 393.3 425.2 438.6 443.6 435.0
Realized gains on investments (0.2) 2.1 1.1 3.0 3.2
--------- --------- --------- --------- ---------
Total Revenue 393.2 427.3 439.7 446.6 438.2
========= ========= ========= ========= =========
Average capital 601.1 618.1 517.7 551.2 488.2
Return on average capital 11.0% (17.5%) 13.7% (2.5%) 12.5%
- -----------------------------------------------------------------------------------------------------------------
Unit Linked Assets - Beg of Year 4.307 5.074 5.643 6.265 7.220
Deposits 0.446 0.569 0.473 0.537 0.554
Withdrawals (incl. chgs) & Deaths (0.420) (0.503) (0.547) (0.566) (0.644)
--------- --------- --------- --------- ---------
Net Cash Flows 0.026 0.066 (0.074) (0.029) (0.090)
Inv Inc & Chg in Mkt Val 0.269 0.682 0.662 1.154 (0.154)
Acq of new business/companies 0.000 0.000 0.000 0.000 0.000
Foreign currency adjustment 0.472 (0.179) 0.035 (0.170) (0.536)
--------- --------- --------- --------- ---------
Unit Linked Assets - End of Year 5.074 5.643 6.265 7.220 6.441
========= ========= ========= ========= =========
Net Initial Commision Values *(Millions) 47.308 55.416 54.924 51.388 32.602
Individual Life Sales (Billions) 2.704 1.983 2.154 2.274 1.719
Individual Life In-force (Billions) 23.835 25.026 25.002 25.698 24.290
Exchange Rate - Dollars to Pounds
For the Year 1.567 1.644 1.658 1.617 1.518
End of Year 1.713 1.651 1.660 1.615 1.493
Claims Paying Rating - S & P** A A BBB BBB-
*Net Initial Commission Value is a measure used by Lincoln UK to measure sales progress and future profitability.
**Prior to the fourth quarter of 1998 the Lincoln UK rating was based on its affiliation with Lincoln National
Corporation.
Subsequent to the fourth quarter of 1998 the rating, provided by S&P reflects Lincoln UK's rating on a stand alone
basis.
Lincoln UK
Income Statements & Operational Data
Unaudited [Millions of Dollars]
For the Quarter Ended Mar Jun Sep Dec Mar Jun
1998 1998 1998 1998 1999 1999
------ ------ ------ ------ ------ ------
Operating Revenue
Premiums 36.9 33.7 33.7 52.3 43.9 29.0
Surrender charges
Mortality assessments 6.3 8.1 7.3 7.6 6.7 7.7
Expense assessments 36.9 54.0 39.0 23.7 43.9 51.9
Other revenue and fees 1.4 7.0 1.2 1.6 2.9 3.5
Net investment income 21.6 21.3 21.4 23.6 21.7 19.6
Equity earnings in unconsol affiliates
------ ------ ------ ------ ------ ------
Operating Revenue 103.2 124.1 102.6 108.7 119.2 111.8
------ ------ ------ ------ ------ ------
Benefits and Expenses
Benefits paid or provided:
Benefits 32.9 36.1 36.3 45.7 35.7 31.5
Underwriting, acquisition,
insurance and other expenses 43.0 55.0 44.1 33.6 55.3 55.2
Goodwill amortization 0.8 1.2 0.6 3.7 1.2 1.2
------ ------ ------ ------ ------ ------
Total Benefits & Expenses 76.7 92.3 80.9 83.0 92.2 87.9
------ ------ ------ ------ ------ ------
Income from Operations Before Tax 26.5 31.8 21.7 25.7 27.0 23.9
Federal income taxes 9.4 14.6 4.0 6.9 8.9 4.9
------ ------ ------ ------ ------ ------
Income from Operations 17.2 17.2 17.7 18.8 18.1 19.0
Realized gain on investments 0.2 0.1 0.1 0.4 (0.0) 1.0
Restructuring charges
------ ------ ------ ------ ------ ------
Net Income 17.4 17.4 17.8 19.2 18.0 20.0
====== ====== ====== ====== ====== ======
Effective tax rate 35.3% 45.8% 18.4% 27.0% 33.0% 20.4%
Operating Revenue 103.2 124.1 102.6 108.7 119.2 111.8
Realized gains on investments 0.3 0.1 0.2 0.5 (0.1) 1.4
------ ------ ------ ------ ------ ------
Total Revenue 103.5 124.2 102.8 109.2 119.1 113.1
====== ====== ====== ====== ====== ======
Average capital 503.4 511.2 522.6 533.8 519.2 526.9
Return on average capital 13.7% 13.5% 13.6% 14.1% 13.9% 14.4%
- ----------------------------------------------------------------------------------------------------------------
Unit Linked Assets
Balance - Beg of Quarter (Billions) 5.643 6.297 6.310 5.711 6.265 6.348
Deposits 0.122 0.100 0.115 0.136 0.131 0.119
Withdrawals (incl. chgs) & Deaths (0.140) (0.136) (0.133) (0.139) (0.136) (0.137)
------ ------ ------ ------ ------ ------
Net Cash Flows (0.018) (0.035) (0.018) (0.003) (0.005) (0.017)
Inv Inc & Chg in Mkt Val 0.592 0.061 (0.687) 0.696 0.271 0.314
Acq of new business/companies 0.000 0.000 0.000 0.000 0.000 0.000
Foreign currency adjustment 0.080 (0.013) 0.107 (0.139) (0.184) (0.141)
------ ------ ------ ------ ------ ------
Unit Linked Assets - End of Quarter 6.297 6.310 5.711 6.265 6.348 6.503
====== ====== ====== ====== ====== ======
Net Initial Commision Values *(Millions) 13.964 13.273 13.177 14.510 11.967 12.407
Individual Life Sales (Billions) 0.489 0.510 0.555 0.600 0.485 0.555
Individual Life In-force (Billions) 25.536 25.838 25.612 25.002 25.246 25.107
Exchange Rate - Dollars to Pounds
For the Quarter 1.646 1.658 1.666 1.661 1.631 1.602
End of Quarter 1.671 1.668 1.700 1.660 1.612 1.577
Claims Paying Rating - S & P** A A A A BBB BBB
Lincoln UK
Income Statements & Operational Data
Unaudited [Millions of Dollars]
For the Quarter Ended Sep Dec Mar Jun Sep Dec
1999 1999 2000 2000 2000 2000
------ ------ ------ ------ ------ ------
Operating Revenue
Premiums 33.5 38.7 39.0 36.3 32.5 40.5
Surrender charges
Mortality assessments 7.7 5.0 6.3 8.0 9.6 7.5
Expense assessments 49.3 37.2 46.5 44.3 52.6 34.6
Other revenue and fees 3.6 3.8 2.4 1.3 2.0 1.3
Net investment income 16.2 17.7 18.9 18.5 16.1 16.7
Equity earnings in unconsol affiliates
------ ------ ------ ------ ------ ------
Operating Revenue 110.3 102.4 113.2 108.4 112.8 100.6
------ ------ ------ ------ ------ ------
Benefits and Expenses
Benefits paid or provided:
Benefits 27.2 211.8 35.0 37.4 51.9 54.2
Underwriting, acquisition,
insurance and other expenses 61.6 51.4 56.4 43.5 45.2 34.9
Goodwill amortization 1.2 3.3 1.3 1.3 1.2 0.2
------ ------ ------ ------ ------ ------
Total Benefits & Expenses 90.1 266.6 92.8 82.2 98.3 89.3
------ ------ ------ ------ ------ ------
Income from Operations Before Tax 20.2 (164.2) 20.4 26.2 14.5 11.3
Federal income taxes 4.0 (97.1) 4.7 6.9 3.9 (4.2)
------ ------ ------ ------ ------ ------
Income from Operations 16.2 (67.1) 15.7 19.3 10.6 15.5
Realized gain on investments 0.2 1.0 (0.2) (0.1) (0.0) 2.6
Restructuring charges (6.5) (40.5) (36.1)
------ ------ ------ ------ ------ ------
Net Income 16.4 (72.6) 15.5 19.1 (29.9) (17.9)
====== ====== ====== ====== ====== ======
Effective tax rate 20.0% 59.1% 22.9% 26.4% 27.2% -37.1%
Operating Revenue 110.3 102.4 113.2 108.4 112.8 100.6
Realized gains on investments 0.3 1.4 (0.4) (0.2) (0.0) 3.8
------ ------ ------ ------ ------ ------
Total Revenue 110.5 103.8 112.8 108.2 112.8 104.3
====== ====== ====== ====== ====== ======
Average capital 573.5 585.0 516.4 500.8 486.5 448.9
Return on average capital 11.3% (45.9%) 12.2% 15.4% 8.7% 13.8%
- ----------------------------------------------------------------------------------------------------------------
Unit Linked Assets
Balance-Beg of Quarter (Billions) 6.503 6.568 7.220 7.031 6.726 6.499
Deposits 0.130 0.156 0.159 0.134 0.145 0.116
Withdrawals (incl. chgs) & Deaths (0.136) (0.158) (0.170) (0.162) (0.159) (0.153)
------ ------ ------ ------ ------ ------
Net Cash Flows (0.005) (0.002) (0.011) (0.028) (0.014) (0.037)
Inv Inc & Chg in Mkt Val (0.214) 0.784 (0.077) 0.047 (0.025) (0.100)
Acq of new business/companies 0.000 0.000 0.000 0.000 0.000 0.000
Foreign currency adjustment 0.284 (0.130) (0.101) (0.324) (0.189) 0.078
------ ------ ------ ------ ------ ------
Unit Linked Assets - End of Quarter 6.568 7.220 7.031 6.726 6.499 6.441
====== ====== ====== ====== ====== ======
Net Initial Commision Values *(Millions) 13.459 13.556 11.522 10.345 9.472 1.264
Individual Life Sales (Billions) 0.571 0.663 0.655 0.581 0.434 0.049
Individual Life In-force (Billions) 26.235 25.698 26.514 25.225 24.535 24.290
Exchange Rate - Dollars to Pounds
For the Quarter 1.614 1.625 1.599 1.536 1.482 1.454
End of Quarter 1.647 1.615 1.591 1.517 1.475 1.493
Claims Paying Rating - S & P** BBB BBB BBB- BBB- BBB- BBB-
*Net Initial Commission Value is a measure used by Lincoln UK to measure sales progress and future profitability.
**Prior to the fourth quarter of 1998 the Lincoln UK rating was based on its affiliation with Lincoln National
Corporation.
Subsequent to the fourth quarter of 1998 the rating, provided by S&P reflects Lincoln UK's rating on a stand alone
basis.
Reinsurance
Income Statements & Operational Data
Unaudited [Millions of Dollars]
For the Year Ended December 31 1996 1997 1998 1999 2000
------ ------ ------ ------ ------
Operating Revenue
Life and annuity premiums 472.2 466.7 592.0 743.1 968.5
Health premiums 775.6 566.1 628.6 692.3 404.6
Surrender charges 2.7 3.4 3.3 2.8 3.7
Mortality assessments 0.0 0.0 0.7 0.7 0.0
Expense assessments 0.0 0.0 0.3 0.3 (0.0)
Other revenue and fees 28.7 35.5 39.3 64.6 72.7
Net investment income 266.8 290.6 316.2 318.6 321.7
Equity earnings in unconsol affiliates 0.0 2.1 3.3 5.8 2.1
------ ------ ------ ------ ------
Operating Revenue 1545.9 1364.3 1583.7 1828.2 1773.3
------ ------ ------ ------ ------
Benefits and Expenses
Benefits paid or provided:
Life and annuity policy benefits 305.7 321.4 452.2 530.6 716.1
Div accum & div to policyholders 9.3 9.3 7.3 6.9 6.7
Interest credited to policy bal. 40.3 50.3 44.1 47.3 42.2
Health policy benefits 658.6 824.4 556.3 646.5 434.8
Underwriting, acquisition,
insurance and other expenses 413.0 387.4 359.5 531.2 379.8
Goodwill amortization 0.0 0.0 0.0 0.4 1.8
Interest on notes payable 2.9 0.0 1.0 11.2
------ ------ ------ ------ ------
Total Benefits & Expenses 1429.7 1592.9 1419.3 1763.9 1592.6
------ ------ ------ ------ ------
Income from Operations Before Tax 116.1 (228.6) 164.4 64.3 180.7
Federal income taxes 39.6 (80.2) 57.1 20.8 55.8
------ ------ ------ ------ ------
Income from Operations (1) 76.5 (148.4) 107.3 43.5 124.9
Realized gain on investments 12.0 16.3 (2.6) 3.7 (0.7)
Restructuring charges (3.2) 0.7
------ ------ ------ ------ ------
Net Income (1) 88.5 (132.1) 104.7 44.1 124.9
====== ====== ====== ====== ======
Effective tax rate 34.1% 35.1% 34.7% 32.3% 30.9%
Operating Revenue 1545.9 1364.3 1583.7 1828.2 1773.3
Realized gains on investments 18.5 25.2 (3.5) 5.7 (1.0)
------ ------ ------ ------ ------
Total Revenue 1564.4 1389.5 1580.3 1833.9 1772.3
====== ====== ====== ====== ======
- ------------------------------------------------------------------------------------------------------------------
Revenue by Source
Individual Markets 468.1 503.9 633.6 814.1 1,053.4
Group Markets 158.7 131.6 130.6 168.0 318.0
Financial Reinsurance 531.1 365.2 279.3 344.5 127.3
Other 22.6 29.2 12.2 (0.4) 16.6
------ ------ ------ ------ ------
Total Revenue, Excl Exited Businesses 1180.5 1029.9 1055.7 1326.2 1515.2
Exited Businesses Under Management (2) 383.9 359.6 524.6 507.7 257.1
------ ------ ------ ------ ------
Total Revenue 1564.4 1389.5 1580.3 1833.9 1772.3
====== ====== ====== ====== ======
Income from Operations by Source
Individual Markets 49.8 71.9 83.5 91.9 90.6
Group Markets 10.2 3.3 1.6 (1.6) 7.5
Financial Reinsurance 17.5 15.5 17.1 21.7 20.3
Other (0.3) (0.3) (1.0) (1.4) (5.2)
------ ------ ------ ------ ------
Inc from Oper, Excl Exited Businesses 77.3 90.5 101.3 110.5 113.2
Exited Businesses Under Management (2) (0.8) (238.8) 6.1 (67.0) 11.7
------ ------ ------ ------ ------
Inc from Operations (1) 76.5 (148.4) 107.3 43.5 124.9
====== ====== ====== ====== ======
Individual Life Sales
[Billions of Dollars] 26.6 39.5 78.1 116.8 139.5
Ind Life In-Force 130.8 153.1 213.6 306.6 407.4
Group Life In-Force 30.1 30.4 36.7 34.2 29.3
------ ------ ------ ------ ------
Total Life In-Force 160.9 183.5 250.3 340.8 436.7
====== ====== ====== ====== ======
[Billions of Dollars]
Ratios [Percentages]
Individual Life Mortality
Actual to Expected Loss Ratio 93.0 84.9 87.8 88.9 97.8
Employer Stop Loss-
Loss Ratio 67.6 52.8 77.7 84.3 74.0
Combined Ratio 93.3 84.7 108.4 115.0 99.4
Average Capital 651.7 788.4 950.3 1053.0 1062.0
Average Capital, Excl Exited Business 389.6 459.1 486.1 603.1 744.2
Return on Average Capital, Excl Exited Business (3) 19.8% 19.7% 20.8% 18.3% 15.2%
(1) Fourth quarter and full year 1999 income from operations and net income include a charge of $40.4 million for
Lincoln's participation in workers compensation carve-out business. Fourth quarter and full year 1997 income from
operations and net income include a change in estimate for personal accident programs of $113.7 million. Also the
years 1993, 1995 and 1997 include reserve strengthening for the disability income business.
(2) Exited Businesses Under Management include disability income, HMO excess-of-loss, carrier medical, personal
accident and Lincoln's investment in Seguros Serfin Lincoln.
(3) LNC manages the relative mixture of debt and equity capital at the consolidated level. Because consolidated
debt is not allocated in arriving at the reported return on capital for LNC's business segments, the return on
capital calculation differs from a return on equity calculation. For this business segment, allocating consolidated
leverage would result in a higher return on equity as compared to the return on capital reported above.
Reinsurance
Income Statements & Operational Data
Unaudited [Millions of Dollars]
For the Quarter Ended Mar Jun Sep Dec Mar Jun
1998 1998 1998 1998 1999 1999
------ ------ ------ ------ ------ ------
Operating Revenue
Life and annuity premiums 121.4 124.1 146.4 200.1 172.0 173.1
Health premiums 141.0 169.6 154.5 163.5 153.3 158.7
Surrender charges 0.5 0.3 1.6 0.9 1.2 0.4
Mortality assessments 0.7 0.7 0.1
Expense assessments 0.3 0.4 (0.0)
Other revenue and fees 9.4 4.4 13.2 12.3 11.0 13.6
Net investment income 77.3 78.8 79.4 80.7 80.2 79.8
Equity earnings in unconsol affiliates 1.5 0.7 (0.2) 1.3 1.6 1.1
------ ------ ------ ------ ------ ------
Operating Revenue 351.1 378.1 394.8 459.8 420.4 426.7
------ ------ ------ ------ ------ ------
Benefits and Expenses
Benefits paid or provided:
Life and annuity policy benefits 80.9 87.8 91.1 192.4 124.3 123.0
Div accum & div to policyholders 1.8 1.6 2.3 1.6 1.3 1.5
Interest credited to policy bal. 10.1 7.1 14.6 12.2 8.9 10.9
Health policy benefits 131.2 156.4 139.7 129.0 143.5 161.7
Underwriting, acquisition,
insurance and other expenses 84.5 87.9 102.1 85.1 89.0 92.7
Goodwill amortization 0.0 0.0 0.0 0.0 (0.0) (0.8)
Interest on notes payable 0.0 0.0 0.0 0.0
------ ------ ------ ------ ------ ------
Total Benefits & Expenses 308.4 340.9 349.7 420.3 366.9 389.1
------ ------ ------ ------ ------ ------
Income from Operations Before Tax 42.7 37.2 45.1 39.5 53.5 37.7
Federal income taxes 15.0 13.1 15.5 13.5 18.8 13.2
------ ------ ------ ------ ------ ------
Income from Operations (1) 27.7 24.1 29.6 26.0 34.6 24.4
Realized gain on investments 2.8 1.2 (5.1) (1.4) 0.7 0.3
Restructuring charges
------ ------ ------ ------ ------ ------
Net Income (1) 30.4 25.2 24.5 24.6 35.3 24.7
====== ====== ====== ====== ====== ======
Effective tax rate 35.1% 35.3% 34.3% 34.2% 35.3% 35.2%
Operating Revenue 351.1 378.1 394.8 459.8 420.4 426.7
Realized gains on investments 4.4 2.5 (8.5) (1.8) 1.2 0.4
------ ------ ------ ------ ------ ------
Total Revenue 355.4 380.5 386.4 457.9 421.6 427.1
====== ====== ====== ====== ====== ======
- --------------------------------------------------------------------------------------------------------------------
Reinsurance
Income Statements & Operational Data
Unaudited [Millions of Dollars]
(continued)
For the Quarter Ended Sep Dec Mar Jun Sep Dec
1999 1999 2000 2000 2000 2000
------ ------ ------ ------ ------ ------
Operating Revenue
Life and annuity premiums 166.2 231.9 227.4 229.1 238.9 273.2
Health premiums 148.3 232.0 57.0 142.6 116.5 88.6
Surrender charges 0.6 0.7 0.6 1.4 0.9 0.8
Mortality assessments 0.0 (0.2) 0.0 0.0 0.0 0.0
Expense assessments (0.0) (0.2) (0.0) (0.0) (0.0) (0.0)
Other revenue and fees 7.5 32.4 16.3 12.6 22.5 21.3
Net investment income 81.2 77.4 91.4 74.1 78.8 77.4
Equity earnings in unconsol affiliates 1.2 1.8 1.0 0.2 0.2 0.6
------ ------ ------ ------ ------ ------
Operating Revenue 405.1 575.9 393.7 460.0 457.8 461.8
------ ------ ------ ------ ------ ------
Benefits and Expenses
Benefits paid or provided:
Life and annuity policy benefits 108.8 174.5 165.4 173.5 178.0 199.2
Div accum & div to policyholders 1.9 2.2 1.3 1.5 1.8 2.1
Interest credited to policy bal. 6.0 21.5 9.0 8.6 12.8 11.9
Health policy benefits 187.4 153.9 110.0 117.5 119.0 88.2
Underwriting, acquisition,
insurance and other expenses 94.9 254.6 59.8 116.9 100.1 102.9
Goodwill amortization 0.8 0.4 0.4 0.4 0.4 0.4
Interest on notes payable 0.0 1.0 2.3 2.7 3.0 3.2
------ ------ ------ ------ ------ ------
Total Benefits & Expenses 399.7 608.2 348.3 421.1 415.2 407.9
------ ------ ------ ------ ------ ------
Income from Operations Before Tax 5.4 (32.2) 45.4 38.9 42.5 53.9
Federal income taxes 2.1 (13.4) 12.6 12.5 13.9 16.8
------ ------ ------ ------ ------ ------
Income from Operations (1) 3.3 (18.8) 32.8 26.4 28.7 37.1
Realized gain on investments 0.3 2.4 1.2 (1.1) (2.2) 1.4
Restructuring charges (3.2) 0.7
------ ------ ------ ------ ------ ------
Net Income (1) 0.4 (16.4) 34.0 25.3 26.5 39.2
====== ====== ====== ====== ====== ======
Effective tax rate 38.5% 41.6% 27.7% 32.2% 32.6% 31.2%
Operating Revenue 405.1 575.9 393.7 460.0 457.8 461.8
Realized gains on investments 0.4 3.7 1.9 (1.7) (3.4) 2.2
------ ------ ------ ------ ------ ------
Total Revenue 405.5 579.7 395.5 458.3 454.4 464.1
====== ====== ====== ====== ====== ======
- --------------------------------------------------------------------------------------------------------------------
For the Quarter Ended Mar Jun Sep Dec Mar Jun
1998 1998 1998 1998 1999 1999
------ ------ ------ ------ ------ ------
Revenue by Source (Including Investment
Gains/Losses)
Individual Markets 134.0 131.4 153.8 214.3 187.9 191.4
Group Markets 29.3 32.4 35.9 33.0 36.5 37.1
Financial Reinsurance 72.6 73.3 75.0 58.4 80.6 81.9
Other 5.5 3.8 3.3 (0.3) (1.5) (0.4)
------ ------ ------ ------ ------ ------
Total Revenue, Excl Exited Businesses 241.3 241.0 268.0 305.4 303.5 309.9
Exited Businesses Under Management (2) 114.1 139.5 118.4 152.5 118.1 117.2
------ ------ ------ ------ ------ ------
Total Revenue 355.4 380.5 386.4 457.9 421.6 427.1
====== ====== ====== ====== ====== ======
Income from Operations by Source
Individual Markets 18.8 15.0 23.2 26.6 25.4 21.3
Group Markets 0.6 (0.4) 1.4 0.1 0.9 0.4
Financial Reinsurance 3.5 3.5 4.7 5.5 7.3 4.7
Other (0.4) (0.1) (0.6) 0.2 (0.3) (0.4)
------ ------ ------ ------ ------ ------
Inc from Oper, Excl Exited Businesses 22.4 17.9 28.6 32.3 33.3 26.1
Exited Businesses Under Management (2) 5.3 6.2 1.0 (6.4) 1.3 (1.7)
------ ------ ------ ------ ------ ------
Income from Operations 27.7 24.1 29.6 26.0 34.6 24.4
====== ====== ====== ====== ====== ======
Individual Life Sales
[Billions of Dollars] 9.6 11.8 16.5 40.2 18.5 20.0
Ind Life In-Force 158.6 166.9 178.3 213.6 225.1 240.0
Group Life In-Force 31.4 33.1 35.3 36.7 38.3 38.5
------ ------ ------ ------ ------ ------
Total Life In-Force 190.0 200.0 213.6 250.3 263.4 278.5
====== ====== ====== ====== ====== ======
[Billions of Dollars]
Ratios [Percentages]
Individual Life Mortality
Actual to Expected Loss Ratio 86.0 90.6 78.0 94.3 85.8 88.9
Actual to Expected Loss Ratio-YTD 86.0 88.4 84.9 87.8 85.8 87.4
Employer Stop Loss-
Loss Ratio 63.8 63.5 66.3 114.3 68.5 81.0
Combined Ratio 93.8 96.5 98.7 141.8 100.8 119.1
Average Capital 879.3 915.8 1002.7 1003.2 1078.4 1048.6
Average Capital, Excl Exited Business (3) 474.1 474.3 488.3 507.8 571.4 577.8
Return on Average Capital,
Excluding Exited Business 18.9% 15.1% 23.5% 25.5% 23.3% 18.1%
(continued)
For the Quarter Ended Sep Dec Mar Jun Sep Dec
1999 1999 2000 2000 2000 2000
------ ------ ------ ------ ------ ------
Revenue by Source (Including Investment
Gains/Losses)
Individual Markets 182.0 252.9 246.8 249.2 262.4 295.0
Group Markets 38.4 56.0 87.7 75.6 77.5 77.2
Financial Reinsurance 72.5 109.5 34.6 29.8 29.4 33.6
Other 0.1 1.3 4.1 3.6 4.8 4.1
------ ------ ------ ------ ------ ------
Total Revenue, Excl Exited Businesses 293.0 419.7 373.2 358.1 374.0 409.9
Exited Businesses Under Management (2) 112.5 159.9 22.4 100.2 80.3 54.2
------ ------ ------ ------ ------ ------
Total Revenue 405.5 579.7 395.5 458.3 454.4 464.1
====== ====== ====== ====== ====== ======
Income from Operations by Source
Individual Markets 24.9 20.2 19.2 22.6 20.5 28.3
Group Markets (1.3) (1.7) 1.0 1.2 1.5 3.7
Financial Reinsurance 4.2 5.5 7.2 4.0 4.5 4.6
Other 0.0 (0.8) (1.0) (0.9) (0.5) (2.7)
------ ------ ------ ------ ------ ------
Inc from Oper, Excl Exited Businesses 27.8 23.3 26.3 26.9 26.0 34.0
Exited Businesses Under Management (2) (24.4) (42.1) 6.4 (0.6) 2.7 3.1
------ ------ ------ ------ ------ ------
Income from Operations 3.3 (18.8) 32.8 26.4 28.7 37.1
====== ====== ====== ====== ====== ======
Individual Life Sales
[Billions of Dollars] 28.8 49.6 30.0 37.2 37.2 35.2
Ind Life In-Force 261.5 306.6 325.9 354.0 381.4 407.4
Group Life In-Force 35.6 34.2 32.5 30.5 31.2 29.3
------ ------ ------ ------ ------ ------
Total Life In-Force 297.1 340.8 358.4 384.4 412.6 436.7
====== ====== ====== ====== ====== ======
[Billions of Dollars]
Ratios [Percentages]
Individual Life Mortality
Actual to Expected Loss Ratio 81.7 97.2 99.5 96.9 101.2 93.9
Actual to Expected Loss Ratio-YTD 86.2 88.9 99.5 98.1 99.3 97.8
Employer Stop Loss-
Loss Ratio 100.8 84.5 74.7 72.6 76.5 72.0
Combined Ratio 133.1 111.8 99.8 100.8 100.9 95.9
Average Capital 1040.3 1044.5 1058.6 1022.7 1058.7 1108.0
Average Capital, Excl Exited Business (3) 615.1 648.0 692.7 732.7 761.1 790.1
Return on Average Capital,
Excluding Exited Business 18.1% 14.4% 15.2% 14.7% 13.6% 17.2%
(1) Fourth quarter 1999 income from operations and net income include a charge of $40.4 million for Lincoln's participation
in workers compensation carve-out business. Fourth quarter and full year 1997 income from operations and net income
include a change in estimate for personal accident programs of $113.7 million.
(2) Exited Businesses Under Management include disability income, HMO excess-of-loss, carrier medical, personal accident
and Lincoln's investment in Seguros Serfin Lincoln.
(3) LNC manages the relative mixture of debt and equity capital at the consolidated level. Because consolidated debt is not
allocated in arriving at the reported return on capital for LNC's business segments, the return on capital calculation
differs from a return on equity calculation. For this business segment, allocating consolidated leverage would result
in a higher return on equity as compared to the return on capital reported above.
Investment Management
Income Statements
Unaudited [Millions of Dollars]
For the Year Ended December 31 1996 1997 1998 1999 2000
--------- --------- --------- --------- ---------
Operating Revenue
Investment advisory fees 199.8 229.9 249.0 248.6 231.6
Investment advisory fees - at cost (1) 43.7 46.2 47.9 37.7 46.1
Other revenue and fees 60.1 78.9 102.6 117.0 124.7
Net investment income 76.4 73.4 66.8 57.9 58.6
--------- --------- --------- --------- ---------
Operating Revenue 380.0 428.4 466.3 461.1 461.1
--------- --------- --------- --------- ---------
Benefits and Expenses
Underwriting, acquisition,
insurance and other expenses 354.0 405.6 412.8 393.3 422.5
Goodwill amortization 13.7 15.5 16.3 16.2 16.2
Interest on notes payable 0.0 0.1 0.4 0.0 0.0
--------- --------- --------- --------- ---------
Total Benefits & Expenses 367.7 421.3 429.5 409.5 438.7
--------- --------- --------- --------- ---------
Income from Operations Before Tax 12.3 7.1 36.8 51.6 22.4
Federal income taxes 9.5 7.4 16.1 18.7 8.4
--------- --------- --------- --------- ---------
Income from Operations 2.8 (0.3) 20.7 32.9 14.0
Realized Gains (after-tax) 6.4 7.0 0.5 (0.1) (2.5)
Restructuring Charge (9.2) (4.6)
--------- --------- --------- --------- ---------
Net Income 9.2 6.7 21.2 23.6 6.9
========= ========= ========= ========= =========
Inc from Oper - Excl Intangible/
Goodwill Amort 26.8 26.8 49.4 60.7 40.8
Operating Revenue 380.0 428.4 466.3 461.1 461.1
Realized gains on investments 9.9 11.6 0.9 (0.1) (3.9)
--------- --------- --------- --------- ---------
Total Revenue 389.9 440.0 467.3 461.0 457.2
========= ========= ========= ========= =========
Average Capital (Securities at Cost) 646.1 653.3 642.3 593.9 575.2
Return on Capital (2) 0.4% 0.0% 3.2% 5.5% 2.4%
- --------------------------------------------------------------------------------------------------------------------------------
For the Quarter Ended Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
1998 1998 1998 1998 1999 1999 1999 1999 2000 2000 2000 2000
-------------------------------------------------------------------------------------------------------
Operating Revenue
Investment advisory fees 63.4 64.9 58.3 62.5 65.1 62.5 60.7 60.3 60.0 57.9 56.9 56.7
Investment advisory fees
- - at cost (1) 11.9 12.1 12.5 11.4 8.7 9.3 8.6 11.1 9.5 10.7 12.4 13.6
Other revenue and fees 23.1 23.8 26.9 28.8 28.1 29.0 27.9 32.0 33.8 32.9 28.5 29.5
Net investment income 16.7 17.1 16.0 17.0 15.2 14.4 14.1 14.2 13.3 12.9 18.5 14.0
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Operating Revenue 115.0 118.0 113.6 119.7 117.1 115.2 111.3 117.6 116.7 114.4 116.2 113.8
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Benefits and Expenses
Underwriting, acquisition,
insurance and other
expenses 104.3 103.8 102.7 102.0 99.0 99.5 95.0 99.7 104.3 103.4 106.8 108.0
Goodwill amortization 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.1 4.1
Interest on notes payable 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (0.0)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Benefits & Expenses 108.4 108.1 106.9 106.1 103.1 103.6 99.1 103.7 108.4 107.5 110.8 112.0
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from Operations
Before Tax 6.6 9.9 6.7 13.6 14.0 11.7 12.2 13.8 8.3 6.9 5.4 1.8
Federal income taxes 3.3 4.4 3.9 4.6 5.6 4.2 4.1 4.9 3.0 2.5 2.5 0.4
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from Operations 3.3 5.5 2.8 9.0 8.4 7.5 8.1 8.9 5.3 4.4 3.0 1.4
Realized Gains (after-tax) 2.0 0.4 (3.7) 1.8 0.2 (0.3) (0.3) 0.4 (0.1) (2.0) (0.2) (0.2)
Restructuring Charge 0.0 0.0 0.0 0.0 (12.1) 0.0 0.0 2.9 0.0 (2.7) 0.0 (1.9)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net Income 5.3 6.0 (0.9) 10.8 (3.6) 7.2 7.7 12.2 5.2 (0.3) 2.7 (0.7)
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Inc from Oper -Excl.
Intangible/Goodwill Amort 10.5 12.7 10.0 16.3 15.5 14.4 15.0 15.7 12.2 11.0 9.6 8.0
Operating Revenue 115.0 118.0 113.6 119.7 117.1 115.2 111.3 117.6 116.7 114.4 116.2 113.8
Realized gain on
investments 3.5 0.7 (6.3) 3.0 0.2 (0.4) (0.5) 0.6 (0.2) (3.1) (0.4) (0.3)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Revenue 118.5 118.7 107.4 122.7 117.3 114.8 110.7 118.1 116.5 111.3 115.9 113.6
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Average Capital
(Securities at Cost) 647.8 644.7 641.4 635.3 612.6 591.6 587.2 584.2 581.5 593.0 567.7 558.5
Return on Capital (2) 2.0% 3.4% 1.8% 5.7% 5.5% 5.1% 5.5% 6.1% 3.6% 2.9% 2.1% 1.0%
(1) Fees labeled "at cost" are calculated on an expense sharing basis and do not include a profit margin.
(2) LNC manages the relative mixture of debt and equity capital at the consolidated level. Because consolidated debt is
not allocated in arriving at the reported return on capital for LNC's business segments, the return on capital calculation
differs from a return on equity calculation. For this business segment, allocating consolidated leverage would result in a
lower return on equity as compared to the return on capital reported above.
Reconciliation of Assets Under Management
Unaudited [Billions of Dollars]
1996 1997 1998 1999 2000
------ ------ ------- ------ ------
Retail Fixed - Bal Beg of Year 6.094 5.853 8.125 8.217 7.424
Fund Sales 0.764 0.961 1.165 0.991 0.712
Redemptions (0.986) (1.271) (1.235) (1.424) (1.365)
Net Money Market (0.079) (0.069) (0.140) (0.110) (0.207)
Transfers (0.114) (0.220) 0.132 0.177 (0.159)
------ ------ ------- ------ ------
Net Cash Flows (0.415) (0.599) (0.078) (0.366) (1.019)
Income Retained 0.237 0.276 0.291 0.276 0.240
Market Apprec/Deprec (0.062) 0.049 (0.121) (0.704) (0.146)
Acq of New Company/Business 2.547
------ ------ ------- ------ ------
Balance at End of Year 5.853 8.125 8.217 7.424 6.499
------ ------ ------- ------ ------
Retail Equity - Bal Beg of Year 9.974 13.152 17.754 22.080 23.383
Fund Sales 2.175 2.953 3.581 3.271 4.048
Redemptions (1.037) (1.926) (2.460) (4.971) (4.369)
Net Money Market 0.000 (0.002) (0.001) 0.001
Transfers 0.188 0.209 0.730 (0.143) (0.178)
------ ------ ------- ------ ------
Net Cash Flows 1.327 1.236 1.849 (1.844) (0.498)
Income Retained 0.039 0.005 0.220 0.120 0.083
Market Apprec/Deprec 1.812 3.317 2.256 3.028 (1.793)
Acq of New Company/Business 0.043
------ ------ ------- ------ ------
Balance at End of Year 13.152 17.754 22.080 23.383 21.174
------ ------ ------- ------ ------
Total Retail - Bal Beg of Year 16.068 19.006 25.879 30.297 30.807
Retail Sales-Annuities 1.638 2.163 2.238 1.561 1.726
Retail Sales-Mutual Funds 0.849 1.218 1.913 2.153 2.452
Retail Sales-Wrap & Other 0.454 0.533 0.596 0.550 0.581
------ ------ ------- ------ ------
Total Retail Sales 2.940 3.914 4.745 4.264 4.760
Redemptions (2.023) (3.197) (3.694) (6.396) (5.733)
Net Money Market (0.079) (0.068) (0.141) (0.111) (0.206)
Transfers 0.074 (0.011) 0.862 0.034 (0.337)
------ ------ ------- ------ ------
Net Cash Flows 0.912 0.637 1.772 (2.209) (1.517)
Income Retained 0.276 0.281 0.511 0.396 0.323
Market Apprec/Deprec 1.750 3.366 2.136 2.324 (1.939)
Acq of New Company/Business 2.590
------ ------ ------- ------ ------
Balance at End of Year 19.006 25.879 30.297 30.807 27.674
- ----------------------------------------------------------------------------------------------
Institutional Fixed - Bal Beg of Year 2.956 3.580 5.708 6.955 6.937
Inflows 1.516 2.509 2.169 2.000 0.771
Withdrawals/Terminations (1.155) (0.787) (1.242) (1.699) (1.973)
Transfers 0.015 0.013 (0.074) (0.001) (0.005)
------ ------ ------- ------ ------
Net Cash Flows 0.376 1.735 0.853 0.300 (1.207)
Income Retained 0.145 0.225 0.333 0.346 0.294
Market Apprec/Deprec 0.104 0.118 0.061 (0.665) 0.087
Acq of New Company/Business 0.051
------ ------ ------- ------ ------
Balance at End of Year 3.580 5.708 6.955 6.937 6.111
------ ------ ------- ------ ------
Institutional Equity - Bal Beg of Year 21.619 22.886 24.871 24.235 23.630
Inflows 1.974 2.465 3.840 5.248 2.730
Withdrawals/Terminations (4.772) (6.447) (7.441) (7.801) (7.209)
Transfers (0.007) (0.068) 0.047 0.011 (0.008)
------ ------ ------- ------ ------
Net Cash Flows (2.805) (4.049) (3.555) (2.542) (4.487)
Income Retained 0.557 0.491 0.473 0.482 0.449
Market Apprec/Deprec 3.514 5.544 2.446 1.453 (0.481)
Acq of New Company/Business
------ ------ ------- ------ ------
Balance at End of Year 22.886 24.871 24.235 23.630 19.111
------ ------ ------- ------ ------
Total Institutional - Bal Beg of Year 24.575 26.465 30.579 31.191 30.567
Inflows 3.490 4.975 6.009 7.249 3.501
Withdrawals/Terminations (5.928) (7.234) (8.683) (9.500) (9.182)
Transfers 0.008 (0.055) (0.027) 0.011 (0.014)
------ ------ ------- ------ ------
Net Cash Flows (2.429) (2.314) (2.702) (2.240) (5.694)
Income Retained 0.702 0.716 0.806 0.829 0.743
Market Apprec/Deprec 3.618 5.662 2.508 0.789 (0.394)
Acq of New Company/Business 0.051
------ ------ ------- ------ ------
Balance at End of Year 26.465 30.579 31.191 30.567 25.222
------ ------ ------- ------ ------
Assets Under Management ------ ------ ------- ------ ------
At End of Year 45.471 56.458 61.488 61.374 52.895
Assets Under Management
At End of Year - At Cost Operations 37.453 35.684 39.432 35.934 35.686
Total Assets Under Management
------ ------ ------- ------ ------
At End of Year 82.924 92.142 100.920 97.308 88.581
====== ====== ======= ====== ======
NOTE: This segment was started in the second quarter of 1995 following
the completion of the acquisition of Delaware Management Holdings, Inc.
Data shown for 1995 reflects a full year of activity.
Reconciliation of Assets Under Management
Unaudited [Billions of Dollars]
March June Sept Dec Mar June
1998 1998 1998 1998 1999 1999
------- ------- ------ ------- ------- ------
Retail Fixed - Bal Beg of Qtr 8.125 8.286 8.260 8.287 8.217 8.233
Fund Sales 0.298 0.241 0.381 0.246 0.316 0.263
Redemptions (0.273) (0.272) (0.302) (0.387) (0.313) (0.366)
Net Money Market (0.055) (0.052) (0.034) (0.000) (0.019) (0.033)
Transfers 0.054 0.042 0.029 0.007 0.032 (0.043)
------- ------- ------ ------- ------- ------
Net Cash Flows 0.024 (0.041) 0.074 (0.134) 0.016 (0.179)
Income Retained 0.075 0.063 0.076 0.076 0.066 0.074
Market Apprec/Deprec 0.061 (0.048) (0.122) (0.012) (0.067) (0.185)
Acq of New Company/Business
------- ------- ------ ------- ------- ------
Balance at End of Qtr 8.286 8.260 8.287 8.217 8.233 7.945
------- ------- ------ ------- ------- ------
Retail Equity - Bal Beg of Qtr 17.754 20.448 21.456 18.785 22.080 21.798
Fund Sales 0.906 1.043 0.830 0.802 0.856 0.790
Redemptions (0.479) (0.518) (0.547) (0.915) (1.030) (1.957)
Net Money Market (0.002) 0.000 0.000 0.000 0.000 (0.001)
Transfers 0.284 0.489 (0.032) (0.011) (0.034) 0.036
------- ------- ------ ------- ------- ------
Net Cash Flows 0.709 1.014 0.252 (0.124) (0.208) (1.132)
Income Retained 0.033 0.054 0.134 (0.001) 0.053 0.061
Market Apprec/Deprec 1.952 (0.059) (3.056) 3.420 (0.128) 1.614
Acq of New Company/Business
------- ------- ------ ------- ------- ------
Balance at End of Qtr 20.448 21.456 18.785 22.080 21.798 22.340
------- ------- ------ ------- ------- ------
Total Retail - Bal Beg of Qtr 25.879 28.734 29.716 27.072 30.297 30.031
Retail Sales-Annuities 0.592 0.598 0.541 0.507 0.428 0.393
Retail Sales-Mutual Funds 0.464 0.513 0.531 0.403 0.565 0.487
Retail Sales-Wrap & Other 0.147 0.173 0.139 0.136 0.182 0.173
------- ------- ------ ------- ------- ------
Total Retail Sales 1.203 1.284 1.211 1.046 1.175 1.053
Redemptions (0.752) (0.791) (0.849) (1.302) (1.343) (2.323)
Net Money Market (0.055) (0.052) (0.034) 0.000 (0.019) (0.033)
Transfers 0.338 0.531 (0.003) (0.004) (0.001) (0.006)
------- ------- ------ ------- ------- ------
Net Cash Flows 0.734 0.972 0.325 (0.260) (0.188) (1.309)
Income Retained 0.108 0.117 0.210 0.075 0.119 0.134
Market Apprec/Deprec 2.014 (0.108) (3.180) 3.409 (0.196) 1.429
Acq of New Company/Business
------- ------- ------ ------- ------- ------
Balance at End of Qtr 28.734 29.716 27.072 30.297 30.031 30.285
------- ------- ------ ------- ------- ------
Sept Dec Mar Jun Sept Dec
1999 1999 2000 2000 2000 2000
------- ------- ------ ------- ------- ------
Retail Fixed - Bal Beg of Qtr 7.945 7.680 7.424 6.964 6.667 6.531
Fund Sales 0.231 0.181 0.146 0.152 0.213 0.200
Redemptions (0.342) (0.403) (0.444) (0.328) (0.321) (0.272)
Net Money Market (0.029) (0.030) (0.067) (0.058) (0.031) (0.051)
Transfers 0.034 0.154 (0.095) (0.045) (0.033) 0.013
------- ------- ------ ------- ------- ------
Net Cash Flows (0.106) (0.098) (0.460) (0.279) (0.171) (0.109)
Income Retained 0.069 0.067 0.061 0.063 0.059 0.057
Market Apprec/Deprec (0.228) (0.225) (0.062) (0.082) (0.023) 0.021
Acq of New Company/Business
------- ------- ------ ------- ------- ------
Balance at End of Qtr 7.680 7.424 6.964 6.667 6.531 6.499
------- ------- ------ ------- ------- ------
Retail Equity - Bal Beg of Qtr 22.340 20.873 23.383 24.102 23.129 23.680
Fund Sales 0.730 0.894 1.220 0.868 0.904 1.055
Redemptions (0.865) (1.120) (1.550) (0.971) (1.027) (0.820)
Net Money Market 0.000 0.000 0.000 0.000 0.001 0.000
Transfers (0.060) (0.086) (0.096) 0.018 (0.033) (0.068)
------- ------- ------ ------- ------- ------
Net Cash Flows (0.195) (0.312) (0.426) (0.085) (0.154) 0.167
Income Retained 0.007 0.000 0.033 0.021 0.005 0.025
Market Apprec/Deprec (1.279) 2.822 1.112 (0.908) 0.701 (2.698)
Acq of New Company/Business
------- ------- ------ ------- ------- ------
Balance at End of Qtr 20.873 23.383 24.102 23.129 23.680 21.174
------- ------- ------ ------- ------- ------
Total Retail - Bal Beg of Qtr 30.285 28.553 30.807 31.066 29.796 30.211
Retail Sales-Annuities 0.332 0.409 0.379 0.358 0.453 0.536
Retail Sales-Mutual Funds 0.514 0.587 0.840 0.556 0.521 0.535
Retail Sales-Wrap & Other 0.116 0.079 0.148 0.106 0.143 0.184
------- ------- ------ ------- ------- ------
Total Retail Sales 0.962 1.075 1.367 1.020 1.118 1.255
Redemptions (1.207) (1.523) (1.995) (1.299) (1.348) (1.092)
Net Money Market (0.029) (0.030) (0.067) (0.058) (0.030) (0.051)
Transfers (0.027) 0.068 (0.191) (0.026) (0.065) (0.054)
------- ------- ------ ------- ------- ------
Net Cash Flows (0.301) (0.410) (0.886) (0.363) (0.326) 0.058
Income Retained 0.076 0.067 0.095 0.083 0.063 0.082
Market Apprec/Deprec (1.507) 2.597 1.051 (0.989) 0.677 (2.677)
Acq of New Company/Business
------- ------- ------ ------- ------- ------
Balance at End of Qtr 28.553 30.807 31.066 29.796 30.211 27.674
------- ------- ------ ------- ------- ------
March June Sept Dec Mar June
1998 1998 1998 1998 1999 1999
------- ------- ------ ------- ------- ------
Institutional Fixed - Bal Beg of Qtr 5.708 6.216 6.400 6.769 6.955 6.984
Inflows 0.975 0.457 0.566 0.170 0.657 0.478
Withdrawals/Terminations (0.387) (0.304) (0.325) (0.225) (0.415) (0.210)
Transfers (0.022) (0.013) (0.046) 0.008 (0.003) 0.003
------- ------- ------ ------- ------- ------
Net Cash Flows 0.566 0.139 0.195 (0.047) 0.239 0.271
Income Retained 0.080 0.092 0.101 0.060 0.089 0.079
Market Apprec/Deprec (0.137) (0.047) 0.073 0.173 (0.300) (0.070)
Acq of New Company/Business
------- ------- ------ ------- ------- ------
Balance at end of Qtr 6.216 6.400 6.769 6.955 6.984 7.264
------- ------- ------ ------- ------- ------
Institutional Equity - Bal Beg of Qtr 24.871 27.868 26.064 21.702 24.235 22.927
Inflows 0.995 0.825 0.855 1.165 1.297 1.179
Withdrawals/Terminations (1.200) (2.505) (1.663) (2.072) (2.540) (2.052)
Transfers 0.006 (0.021) 0.050 0.013 0.011 0.019
------- ------- ------ ------- ------- ------
Net Cash Flows (0.200) (1.702) (0.759) (0.895) (1.232) (0.854)
Income Retained 0.118 0.139 0.119 0.098 0.104 0.118
Market Apprec/Deprec 3.079 (0.241) (3.721) 3.330 (0.180) 1.771
Acq of New Company/Business
------- ------- ------ ------- ------- ------
Balance at End of Qtr 27.868 26.064 21.702 24.235 22.927 23.962
------- ------- ------ ------- ------- ------
Total Institutional - Bal Beg of Qtr 30.579 34.084 32.463 28.471 31.191 29.910
Inflows 1.970 1.282 1.421 1.335 1.953 1.656
Withdrawals/Terminations (1.588) (2.810) (1.988) (2.297) (2.955) (2.262)
Transfers (0.017) (0.035) 0.003 0.021 0.008 0.022
------- ------- ------ ------- ------- ------
Net Cash Flows 0.366 (1.562) (0.564) (0.942) (0.994) (0.584)
Income Retained 0.197 0.230 0.220 0.158 0.193 0.197
Market Apprec/Deprec 2.941 (0.289) (3.649) 3.504 (0.480) 1.702
Acq of New Company/Business
------- ------- ------ ------- ------- ------
Balance at End of Qtr 34.084 32.463 28.471 31.191 29.910 31.226
------- ------- ------ ------- ------- ------
Assets Under Management
------- ------- ------ ------- ------- ------
At End of Qtr 62.818 62.179 55.543 61.488 59.941 61.511
Assets Under Management
At End of Qtr - At Cost Operations 37.846 37.714 38.471 39.432 38.516 37.391
Total Assets Under Management
------- ------- ------ ------- ------- ------
At End of Qtr 100.664 99.893 94.014 100.920 98.457 98.902
======= ======= ====== ======= ======= ======
Sept Dec Mar Jun Sept Dec
1999 1999 2000 2000 2000 2000
------- ------- ------ ------- ------- ------
Institutional Fixed - Bal Beg of Qtr 7.264 7.218 6.937 6.873 6.484 6.275
Inflows 0.446 0.420 0.180 0.148 0.308 0.135
Withdrawals/Terminations (0.294) (0.781) (0.353) (0.520) (0.532) (0.568)
Transfers (0.002) 0.001 (0.005) (0.001) 0.000 0.001
------- ------- ------ ------- ------- ------
Net Cash Flows 0.150 (0.360) (0.178) (0.373) (0.224) (0.433)
Income Retained 0.110 0.068 0.090 0.066 0.089 0.050
Market Apprec/Deprec (0.306) 0.011 0.024 (0.081) (0.074) 0.219
Acq of New Company/Business
------- ------- ------ ------- ------- ------
Balance at end of Qtr 7.218 6.937 6.873 6.484 6.275 6.111
------- ------- ------ ------- ------- ------
Institutional Equity - Bal Beg of Qtr 23.962 23.098 23.630 20.303 20.239 19.041
Inflows 1.839 0.934 0.904 0.669 0.407 0.750
Withdrawals/Terminations (1.165) (2.043) (3.333) (1.354) (1.154) (1.368)
Transfers (0.008) (0.010) (0.004) 0.002 (0.013) 0.007
------- ------- ------ ------- ------- ------
Net Cash Flows 0.666 (1.119) (2.433) (0.683) (0.760) (0.611)
Income Retained 0.167 0.093 0.109 0.132 0.108 0.102
Market Apprec/Deprec (1.697) 1.559 (1.003) 0.488 (0.545) 0.579
Acq of New Company/Business
------- ------- ------ ------- ------- ------
Balance at End of Qtr 23.098 23.630 20.303 20.239 19.041 19.111
------- ------- ------ ------- ------- ------
Total Institutional - Bal Beg of Qtr 31.226 30.316 30.567 27.175 26.722 25.316
Inflows 2.284 1.354 1.084 0.817 0.715 0.885
Withdrawals/Terminations (1.458) (2.825) (3.686) (1.874) (1.686) (1.936)
Transfers (0.010) (0.009) (0.009) 0.000 (0.012) 0.008
------- ------- ------ ------- ------- ------
Net Cash Flows 0.816 (1.480) (2.611) (1.057) (0.983) (1.043)
Income Retained 0.277 0.161 0.198 0.197 0.196 0.151
Market Apprec/Deprec (2.003) 1.569 (0.979) 0.407 (0.619) 0.798
Acq of New Company/Business
------- ------- ------ ------- ------- ------
Balance at End of Qtr 30.316 30.567 27.175 26.722 25.316 25.222
------- ------- ------ ------- ------- ------
Assets Under Management
------- ------- ------ ------- ------- ------
At End of Qtr 58.869 61.374 58.242 56.518 55.527 52.895
Assets Under Management
At End of Qtr - At Cost Operations 36.820 35.934 35.541 34.891 34.981 35.686
Total Assets Under Management
------- ------- ------ ------- ------- ------
At End of Qtr 95.689 97.308 93.783 91.408 90.508 88.581
======= ======= ====== ======= ======= ======
Other Operations
Unaudited [Millions of Dollars]
For the Year Ended December 31 1996 1997 1998 1999 2000
------ ------ ------ ------ ------
Revenue
Lincoln Financial Advisors 111.0 130.1 292.9 325.2 394.2
Other [Including
Consolidating Adjustments] (101.8) (88.1) (168.5) (175.3) (183.8)
------ ------ ------ ------ ------
Operating Revenue 9.3 42.0 124.4 149.9 210.4
Realized gain on investments (3.0) 16.9 4.0 8.6 (4.0)
------ ------ ------ ------ ------
Total Revenue 6.3 58.9 128.3 158.5 206.3
====== ====== ====== ====== ======
Income (Loss)
LNC Financing (49.7) (31.9) (52.5) (83.558) (85.5)
LNC Operations * (14.8) (18.4) (18.5)
Lincoln Financial Advisors (10.2) (5.3) (23.7) (20.771) (11.7)
Other Corporate 2.6 (6.5) 2.1 (5.192) (14.5)
------ ------ ------ ------ ------
Inc (Loss) from Operations (72.1) (62.1) (92.6) (109.521) (111.7)
Realized Gain on Investments (1.0) 8.6 5.3 6.4 (2.5)
Realized Gain on Sale of Subsidiaries
Restructuring Charge 14.3 (0.3)
------ ------ ------ ------ ------
Total Net Income (Loss) (73.1) (53.5) (101.6) (103.1) (113.9)
====== ====== ====== ====== ======
Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
For the Quarter Ended 1998 1998 1998 1998 1999 1999 1999 1999 2000 2000 2000 2000
-----------------------------------------------------------------------------------------------
Revenue
Lincoln Financial Advisors 62.4 73.9 74.8 81.7 67.0 73.9 78.0 106.3 89.4 92.9 93.9 117.9
Other [Including
Consolidating Adjustments] (31.0) (39.9) (48.3) (49.3) (4.6) (13.7) (43.1) (113.9) (40.0) (60.3) (51.9) (31.6)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Operating Revenue 31.4 34.0 26.5 32.4 62.4 60.2 34.9 (7.5) 49.4 32.7 42.0 86.3
Realized gain on investments 2.2 (3.0) 3.1 1.6 0.2 (1.7) 13.8 (3.7) (2.7) 0.4 0.0 (1.8)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Revenue 33.6 31.0 29.7 34.0 62.6 58.5 48.7 (11.2) 46.8 33.1 42.0 84.4
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Income (Loss)
LNC Financing (5.0) (12.8) (15.3) (19.5) (20.9) (21.6) (19.8) (21.3) (21.6) (22.0) (21.9) (20.0)
LNC Operations * (4.2) (5.2) (4.2) (4.9) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Lincoln Financial Advisors (6.0) (6.8) (4.6) (6.4) (8.4) (9.7) (5.3) 2.7 (7.4) (2.9) (3.1) 1.6
Other Corporate 1.6 2.1 0.4 (1.9) (1.7) 1.0 (2.8) (1.7) (6.2) (1.5) 2.7 (9.6)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Inc (Loss) from Oper (13.6) (22.7) (23.7) (32.7) (31.0) (30.3) (27.9) (20.3) (35.2) (26.4) (22.2) (27.9)
Realized Gain on Investments 1.4 (2.1) 1.9 4.1 0.1 (2.0) 9.5 (1.2) (1.6) 0.3 (1.0) (0.2)
Restructuring Charge (14.3) 0.3
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Net Income (Loss) (12.2) (24.8) (21.7) (42.9) (30.9) (32.3) (18.4) (21.5) (36.8) (26.1) (23.2) (27.8)
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
* Starting with the first quarter of 1999, 100% of "LNC Operations" is allocated to the business segments. Prior periods have
not been restated.
Consolidated Retail Deposits/Account Balances
Unaudited [Billions of Dollars]
1996 1997 1998 1999 2000
------ ------ ------ ------ ------
Deposits - For the Year
Annuities Segment - Fixed Annuities 1.689 1.556 1.265 2.271 1.903
Annuities Segment - Variable Annuities 2.746 2.695 2.791 2.553 3.165
Annuities Segment - Life Insurance 0.000 0.000 0.000 0.017 0.014
Life Insurance Segment - Life Insurance 0.405 0.384 1.207 1.698 1.884
Life Insurance Segment - Fixed Annuities 0.164 0.076 0.187 0.291 0.171
Inv Mgmt - Annuities 1.638 2.163 2.238 1.561 1.726
Inv Mgmt - Mutual Funds 0.849 1.218 1.913 2.153 2.452
Inv Mgmt - Wrap Fee & Other 0.454 0.533 0.596 0.550 0.581
Consolidating Adjustments (0.684) (0.966) (1.041) (0.499) (0.406)
------ ------ ------ ------ ------
Deposits - U.S. 7.259 7.658 9.157 10.597 11.491
Lincoln UK 0.446 0.569 0.473 0.537 0.554
UK Consoldating Adjustment (0.022) (0.023) (0.019) (0.064)
------ ------ ------ ------ ------
Gross Deposits 7.705 8.205 9.608 11.115 11.981
====== ====== ====== ====== ======
Account Balances - End of Year
Annuities Segment - Fixed Annuities 13.486 13.335 14.485 14.764 13.582
Annuities Segment - Variable Annuities 20.383 27.346 33.358 41.493 39.427
Annuities Segment - Life Insurance 0.155 0.160
Life Insurance Segment - Life Insurance 2.869 3.038 9.243 10.217 10.847
Life Insurance Segment - Fixed Annuities 2.332 2.123 2.020 2.027 1.860
Inv Mgmt - Annuities 7.915 10.991 14.257 15.526 13.494
Inv Mgmt - Mutual Funds 9.017 12.484 13.528 13.632 12.805
Inv Mgmt - Wrap Fee & Other 2.074 2.403 2.512 1.649 1.375
Consolidating Adjustments (5.098) (6.806) (8.891) (9.175) (7.753)
------ ------ ------ ------ ------
Account Balances - U.S. 52.978 64.914 80.512 90.288 85.797
Lincoln UK 5.074 5.643 6.265 7.220 6.441
UK Consoldating Adjustment (0.024) (0.447) (0.347) (0.339)
------ ------ ------ ------ ------
Consolidated Account Balances 58.052 70.533 86.329 97.161 91.899
====== ====== ====== ====== ======
Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
1998 1998 1998 1998 1999 1999 1999 1999 2000 2000 2000 2000
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Deposits - For the Quarter
Annuities Segment -
Fixed Annuities 0.333 0.357 0.299 0.276 0.428 0.575 0.604 0.664 0.530 0.442 0.472 0.459
Annuities Segment -
Variable Annuities 0.701 0.810 0.647 0.633 0.635 0.651 0.634 0.634 0.797 0.793 0.729 0.846
Annuities Segment -
Life Insurance 0.003 0.005 0.004 0.005 0.003 0.003 0.004 0.004
Life Insurance Segment -
Life Insurance 0.220 0.259 0.254 0.475 0.394 0.379 0.399 0.526 0.424 0.411 0.428 0.622
Life Insurance Segment -
Fixed Annuities 0.031 0.051 0.046 0.059 0.061 0.079 0.074 0.077 0.059 0.048 0.041 0.023
Inv Mgmt - Annuities 0.592 0.598 0.541 0.507 0.428 0.393 0.332 0.409 0.379 0.358 0.453 0.536
Inv Mgmt - Mutual Funds 0.464 0.513 0.531 0.403 0.565 0.487 0.514 0.587 0.840 0.556 0.521 0.535
Inv Mgmt - Wrap Fee
& Other 0.147 0.173 0.139 0.136 0.182 0.173 0.116 0.079 0.148 0.106 0.143 0.184
Consolidating Adjustments (0.260) (0.294) (0.232) (0.254) (0.142) (0.143) (0.096) (0.118) (0.099) (0.062) (0.100) (0.145)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Deposits - U.S. 2.228 2.466 2.226 2.234 2.554 2.599 2.581 2.864 3.081 2.655 2.691 3.064
Lincoln UK 0.122 0.100 0.115 0.136 0.131 0.119 0.130 0.156 0.159 0.134 0.145 0.116
UK Consoldating
Adjustment (0.000) (0.011) (0.007) (0.004) (0.004) (0.005) (0.004) (0.006) (0.006) (0.006) (0.010) (0.042)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Gross Deposits 2.350 2.555 2.334 2.366 2.682 2.714 2.707 3.014 3.233 2.783 2.827 3.138
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Account Balances - End of Quarter
Annuities Segment -
Fixed Annuities 14.492 14.365 14.456 14.485 14.631 14.750 14.913 14.764 14.248 13.954 13.782 13.582
Annuities Segment -
Variable Annuities 32.933 33.458 29.476 33.358 34.148 37.233 35.613 41.493 44.640 43.097 42.743 39.427
Annuities Segment -
Life Insurance 0.115 0.130 0.128 0.155 0.169 0.165 0.166 0.160
Life Insurance Segment -
Life Insurance 6.276 6.394 6.443 9.243 9.416 9.628 9.726 10.217 10.470 10.538 10.716 10.847
Life Insurance Segment -
Fixed Annuities 2.086 2.049 2.020 2.020 2.025 2.029 2.021 2.027 2.004 1.955 1.918 1.860
Inv Mgmt - Annuities 12.947 13.829 12.270 14.257 14.166 14.981 14.004 15.526 15.531 14.861 14.824 13.494
Inv Mgmt - Mutual Funds 13.283 13.333 12.549 13.528 13.442 13.654 12.938 13.632 14.201 13.604 14.102 12.805
Inv Mgmt -
Wrap Fee & Other 2.504 2.553 2.253 2.512 2.424 1.650 1.611 1.649 1.335 1.331 1.285 1.375
Consolidating Adjustments (7.872) (8.611) (7.326) (8.891) (8.798) (9.050) (8.387) (9.175) (8.768) (8.419) (8.644) (7.753)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Account Balances - U.S. 76.649 77.371 72.142 80.512 81.570 85.004 82.567 90.288 93.831 91.086 90.893 85.797
Lincoln UK 6.297 6.310 5.711 6.265 6.348 6.503 6.568 7.220 7.031 6.726 6.499 6.441
UK Consoldating
Adjustment (0.400) (0.415) (0.366) (0.447) (0.421) (0.414) (0.359) (0.347) (0.345) (0.338) (0.336) (0.339)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Consolidated Account
Balances 82.547 83.265 77.487 86.329 87.497 91.093 88.776 97.161 100.517 97.474 97.056 91.899
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
NOTE: Excludes amounts reported as Assets Under Management - At Cost Operations
Consolidated Information - Individual Life Insurance In-Force
Unaudited [Billions of Dollars]
December 31 1996 1997 1998 1999 2000
------- ------- ------- ------- -------
Life Insurance Segment 49.2 63.2 172.9 195.0 216.0
Annuities Segment 0.6 0.7
Lincoln UK 23.8 25.0 25.0 25.7 24.3
Reinsurance 160.9 183.5 250.3 340.8 436.7
Consolidating Adjustment (5.6) (9.9) (11.3) (11.4)
------- ------- ------- ------- -------
Total 233.9 266.1 438.3 550.7 666.3
======= ======= ======= ======= =======
Mar Jun Sep Dec Mar Jun Sep
End of Quarter 1998 1998 1998 1998 1999 1999 1999
------- ------- ------- ------- ------- ------- -------
Life Insurance Segment 108.8 115.2 121.8 172.9 178.5 184.5 188.9
Annuities Segment 0.5 0.5
Lincoln UK 25.5 25.8 25.6 25.0 25.2 25.1 26.2
Reinsurance 190.0 200.0 213.6 250.3 263.4 278.5 297.1
Consolidating Adjustment (1.7) (1.9) (2.2) (9.9) (10.3) (10.6) (10.9)
------- ------- ------- ------- ------- ------- -------
Total 322.6 339.1 358.8 438.3 456.9 478.0 501.9
======= ======= ======= ======= ======= ======= =======
Dec Mar Jun Sep Dec
End of Quarter 1999 2000 2000 2000 2000
------- ------- ------- ------- -------
Life Insurance Segment 195.0 201.7 207.5 211.3 216.0
Annuities Segment 0.6 0.6 0.6 0.6 0.7
Lincoln UK 25.7 26.5 25.2 24.5 24.3
Reinsurance 340.8 358.4 384.4 412.6 436.7
Consolidating Adjustment (11.3) (11.4) (11.5) (11.4) (11.4)
------- ------- ------- ------- -------
Total 550.7 575.7 606.2 637.7 666.3
======= ======= ======= ======= =======
Consolidated Investment Data - Assets Managed
Unaudited [Billions of Dollars]
December 31 1996 1997 1998 1999 2000
------- ------- ------- ------- -------
Assets Managed by Source
LNC's Investments and Cash:
Fixed maturity securities 24.097 24.066 30.233 27.689 27.450
Equity securities 0.558 0.660 0.543 0.604 0.571
Other investments 5.076 5.092 7.154 7.286 7.369
------- ------- ------- ------- -------
Total LNC Investments 29.730 29.819 37.929 35.578 35.390
Separate accounts 28.809 37.139 43.409 53.654 50.580
Cash and Invested Cash 1.145 3.795 2.433 1.896 1.927
Discontinued Operations 4.402
------- ------- ------- ------- -------
Total LNC 64.086 70.752 83.772 91.128 87.897
Non-affiliate assets managed 40.968 48.331 50.061 49.314 43.397
------- ------- ------- ------- -------
Total Assets Managed 105.054 119.083 133.833 140.443 131.294
======= ======= ======= ======= =======
Assets Managed by Advisor
Investment Management segment 45.471 56.457 61.488 61.374 52.895
(See page 24 for additional detail)
Lincoln Investment Management-Corp 37.453 35.684 39.432 35.934 35.686
(Assets managed internally-see page 24)
Lincoln (UK) 6.107 6.775 7.573 8.589 7.873
Policy Loans (within business units) 0.758 0.763 1.840 1.892 1.961
Non-LNC Affiliates 15.265 19.404 23.500 32.654 32.878
------- ------- ------- ------- -------
Total Assets Managed 105.054 119.083 133.833 140.443 131.294
======= ======= ======= ======= =======
Mar Jun Sep Dec Mar Jun
End of Quarter 1998 1998 1998 1998 1999 1999
------- ------- ------- ------- ------- -------
Assets Managed by Source
LNC's Investments and Cash:
Fixed maturity securities 27.533 27.787 28.554 30.233 30.578 29.579
Equity securities 0.825 0.649 0.505 0.543 0.481 0.506
Other investments 6.873 6.836 6.705 7.154 7.071 7.278
------- ------- ------- ------- ------- -------
Total LNC Investments 35.230 35.272 35.764 37.929 38.129 37.363
Separate accounts 41.741 42.247 37.559 43.409 44.339 47.864
Cash and invested cash 2.642 2.414 2.725 2.433 2.327 2.151
------- ------- ------- ------- ------- -------
Total LNC 79.613 79.933 76.048 83.772 84.796 87.378
Non-affiliate assets managed 52.963 51.772 46.842 50.061 48.690 49.827
------- ------- ------- ------- ------- -------
Total Assets Managed 132.576 131.705 122.890 133.833 133.486 137.205
======= ======= ======= ======= ======= =======
Assets Managed by Advisor
Investment Management segment 62.819 62.179 55.542 61.488 59.939 61.511
(See page 25 for additional detail)
Lincoln Investment Mgmt. - Corp. 37.846 37.714 38.471 39.432 38.516 37.391
(Assets managed internally-see page 25)
Lincoln (UK) 7.467 7.501 6.932 7.573 7.631 7.746
Policy Loans (within business units) 1.405 1.500 1.517 1.840 1.842 1.847
Non-LNC Affiliates 23.039 22.812 20.427 23.500 25.558 28.710
------- ------- ------- ------- ------- -------
Total Assets Managed 132.576 131.705 122.890 133.833 133.486 137.205
======= ======= ======= ======= ======= =======
Sep Dec Mar Jun Sep Dec
End of Quarter 1999 1999 2000 2000 2000 2000
------- ------- ------- ------- ------- -------
Assets Managed by Source
LNC's Investments and Cash:
Fixed maturity securities 28.708 27.689 27.745 27.078 27.264 27.450
Equity securities 0.507 0.604 0.588 0.560 0.570 0.571
Other investments 7.317 7.286 7.442 7.419 7.471 7.369
------- ------- ------- ------- ------- -------
Total LNC Investments 36.532 35.578 35.775 35.057 35.305 35.390
Separate accounts 46.229 53.654 56.908 54.924 54.411 50.580
Cash and invested cash 2.343 1.896 1.510 1.619 1.436 1.927
------- ------- ------- ------- ------- -------
Total LNC 85.104 91.128 94.192 91.601 91.152 87.897
Non-affiliate assets managed 48.068 49.314 47.150 45.945 45.119 43.397
------- ------- ------- ------- ------- -------
Total Assets Managed 133.172 140.443 141.342 137.546 136.271 131.294
======= ======= ======= ======= ======= =======
Assets Managed by Advisor
Investment Management segment 58.868 61.374 58.243 56.518 55.527 52.895
(See page 25 for additional detail)
Lincoln Investment Mgmt. - Corp. 36.820 35.934 35.541 34.891 34.981 35.686
(Assets managed internally-see page 25)
Lincoln (UK) 7.849 8.589 8.423 8.058 7.838 7.873
Policy Loans (within business units) 1.863 1.892 1.896 1.915 1.936 1.961
Non-LNC Affiliates 27.772 32.654 37.239 36.165 35.989 32.878
------- ------- ------- ------- ------- -------
Total Assets Managed 133.172 140.443 141.342 137.546 136.271 131.294
======= ======= ======= ======= ======= =======
Consolidated Investment Data
Unaudited [Millions of Dollars except as noted]
For the Year Ended December 31 1996 1997 1998 1999 2000
------- ------- ------- ------- -------
Net Investment Income
Fixed Maturity Securities 1690.1 1832.1 2065.8 2232.9 2148.7
Equity Securities 14.4 19.1 22.8 20.1 19.5
Mortgage loans on real estate 292.7 279.2 383.6 369.2 373.8
Real estate 125.4 99.4 86.8 64.1 51.8
Policy loans 40.7 44.5 99.5 116.5 125.0
Invested cash 69.2 102.4 156.8 110.3 87.2
Other investments 14.7 20.6 88.4 51.8 66.8
------- ------- ------- ------- -------
Investment revenue 2247.2 2397.3 2903.7 2964.8 2872.8
Investment expense 159.2 146.6 222.3 157.3 125.7
------- ------- ------- ------- -------
Net Investment Income 2087.9 2250.8 2681.4 2807.5 2747.1
Gross-up of Tax Exempt Income 9.7 12.7 11.6 8.1 7.8
------- ------- ------- ------- -------
Adjusted Net Invest Income 2097.7 2263.5 2693.0 2815.6 2754.9
======= ======= ======= ======= =======
Mean Invested Assets (Cost Basis) 27906.2 30337.3 36573.8 39027.5 37471.3
Ratio of Adjusted Net Invest Inc
Over Mean Invested Assets 7.52% 7.46% 7.36% 7.21% 7.35%
Investment Gains
Realized Gain on Investments 57.6 72.9 13.7 3.8 (17.5)
Real Gain on Sale of Subsidiary
Incr (Decr) in Unreal Gains on Sec
Avail-for-Sale (after DAC/Tax) (208.8) 159.6 116.4 (1,018.1) 491.5
Incr (Decr) in Foreign Exchange 53.0 (20.3) 3.8 (19.9) (8.1)
Securities Available-for-Sale
[Billions of Dollars at End of Year]
Fixed Maturity Sec (Market) 24.097 24.066 30.233 27.689 27.450
Fixed Maturity Sec (Adjusted Cost) 23.200 22.624 28.640 28.357 27.373
Equity Securities (Market) 0.558 0.660 0.543 0.604 0.571
Equity Securities (Adjusted Cost) 0.434 0.518 0.437 0.482 0.458
% of Fixed Maturity Securities (Based on Market)
Treasuries and AAA 32.8% 27.6% 25.6% 22.8% 22.1%
AA or better 41.9% 35.1% 32.6% 29.8% 29.2%
BB or less 7.0% 7.3% 7.0% 8.0% 6.7%
- ------------------------------------------------------------------------------------------------------------------------------------
Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
For the Quarter Ended 1998 1998 1998 1998 1999 1999 1999 1999 2000 2000 2000 2000
----------------------------------------------------------------------------------------------------------
Net Investment Income
Fixed Maturity Securities 502.1 506.3 512.8 544.5 557.8 575.8 551.2 548.0 541.3 544.4 525.3 537.7
Equity Securities 5.6 4.2 4.1 8.9 4.4 4.9 3.9 6.9 3.7 5.7 3.6 6.5
Mortgage loans on real
estate 94.2 90.7 91.3 107.4 94.5 85.5 94.7 94.5 92.0 95.1 94.4 92.3
Real estate 24.2 23.9 20.3 18.4 19.4 18.4 13.7 12.5 11.2 12.5 11.8 16.3
Policy loans 22.9 22.1 24.6 29.8 28.6 28.6 29.4 29.9 30.7 30.9 30.5 32.9
Invested cash 41.7 30.4 40.7 44.0 32.4 23.4 32.4 22.0 27.2 15.1 26.5 18.4
Other investments 20.1 29.4 19.5 19.3 7.5 13.4 9.9 20.9 35.1 2.0 26.9 2.9
------- ------- ------- ------- ------- ------- ------- ------- ------- -------- ------- -------
Investment revenue 710.9 707.0 713.4 772.4 744.6 750.1 735.2 734.9 741.1 705.7 719.1 706.9
Investment expense 52.6 48.3 63.8 57.7 35.1 49.3 38.1 34.8 30.0 31.8 29.0 34.8
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Investment Income 658.4 658.7 649.6 714.7 709.5 700.8 697.1 700.1 711.1 673.8 690.0 672.1
Gross-up of Tax Exempt
Income 3.5 2.9 2.3 3.0 1.8 2.0 1.7 2.6 1.5 2.3 1.4 2.6
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Adjusted Net Invest Income 661.8 661.6 651.9 717.7 711.3 702.8 698.7 702.7 712.6 676.1 691.5 674.7
======= ======= ======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Mean Invested Assets (Cost
Basis) 35827.3 36094.5 36445.0 37619.5 39174.2 39385.3 39111.8 38438.6 38237.4 37306.1 37250.8 37090.8
Ratio of Adjusted Net
Invest Inc Over Mean
Invested Assets 7.39% 7.33% 7.16% 7.63% 7.26% 7.14% 7.15% 7.31% 7.45% 7.25% 7.43% 7.28%
Investment Gains
Realized Gain on
Investments 13.9 16.5 (17.3) 0.5 1.5 (3.5) 4.1 1.6 (0.4) (6.7) (11.6) 1.2
Incr (Decr) in Unreal
Gains on Sec
Avail-for-Sale (after
DAC/Tax) 39.0 (5.5) 304.2 (221.4) (297.7) (255.8) (102.7) (361.9) 54.5 (145.4) 218.8 363.5
Incr (Decr) in Foreign
Exchange 6.2 (0.6) 8.0 (9.8) (19.9) (9.5) 19.6 (10.2) (7.3) (0.9) (2.0) 2.0
Securities Available-for-Sale
[Billions of Dollars at End
of Year]
Fixed Maturity Sec
(Market) 27.533 27.787 28.554 30.233 30.578 29.579 28.708 27.689 27.745 27.078 27.264 27.450
Fixed Maturity Sec
(Adjusted Cost) 26.076 26.233 26.610 28.640 29.681 29.494 28.974 28.357 28.295 27.788 27.727 27.373
Equity Securities (Market) 0.825 0.649 0.505 0.543 0.481 0.506 0.507 0.604 0.588 0.560 0.570 0.571
Equity Securities
(Adjusted Cost) 0.634 0.528 0.470 0.437 0.380 0.385 0.414 0.482 0.475 0.446 0.450 0.458
% of Fixed Maturity
Securities (Based on
Market)
Treasuries and AAA 26.7% 26.4% 26.1% 25.6% 26.3% 25.5% 24.2% 22.8% 22.7% 22.1% 22.3% 22.1%
AA or better 33.6% 33.7% 33.3% 32.6% 33.2% 32.5% 31.1% 29.8% 29.5% 29.2% 29.4% 29.2%
BB or less 7.9% 7.2% 6.3% 7.0% 7.1% 7.0% 7.5% 8.0% 7.4% 8.2% 6.8% 6.7%
Common Stock / Debt Information
Unaudited [Dollars per Share, except Percentages]
For the Year Ended
December 31 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Common Stock [1]
Highest Price 15.338 13.813 19.032 24.125 22.188 26.875 28.500 39.063 49.438 57.500 56.375
Lowest Price 7.688 9.500 12.625 17.344 17.313 17.313 20.375 24.500 33.500 36.000 22.625
Closing Price 10.750 13.688 18.500 21.750 17.500 26.875 26.250 39.063 40.907 40.000 47.313
Dividend Payout Ratio [2] 63.4% 63.5% 38.9% 52.6% 51.0% 39.7% 38.2% 22.8% 43.9% 50.5% 38.3%
Yield [3] 6.3% 5.3% 4.1% 3.8% 4.9% 3.4% 3.7% 2.7% 2.7% 2.9% 2.6%
Preferred Stock
Dividend (Millions) 9.143 13.033 17.246 17.212 17.119 8.644 0.112 0.106 0.100 0.089 0.078
Debt: (End of Period)
Senior Debt Ratings
A.M. Best a
Fitch AA AA- AA- AA- AA- AA- A+ A+ A+
Moody's A2 A2 A1 A2 A2 A2 A2 A2 A3
Standard and Poors A+ A+ A+ A A A A- A- A-
Claims Paying Ratings:
Lincoln Life - A.M. Best A+ A+ A+ A+ A+ A+ A A A
Lincoln Life - Fitch AAA AAA AAA AA+ AA+ AA+ AA+ AA+ AA
Lincoln Life - Moody's A1 A1 Aa3 Aa3 Aa3 Aa3 Aa3 Aa3 Aa3
Lincoln Life - Standard & Poors AA- AA- AA- AA- AA- AA- AA- AA- AA-
First Penn - A.M. Best* A A+ A+ A+ A+ A+ A A A
First Penn - Moody's A1 A1 A1 A1
First Penn - Standard & Poors* AA- AA- AA- AA- AA- AA- AA- AA- AA-
LLA of New York - A.M. Best* A+ A+ A A A
LLA of New York - Fitch* AA+ AA+ AA+ AA
LLA of New York - Moody's A1 A1 A1 A1 A1
LLA of New York - Standard & Poors* AA- AA- AA- AA- AA-
Ratios
Debt to Total Capitalization [4] 25.7% 21.1% 19.9% 22.8% 18.8% 17.0% 21.2% 23.2% 20.8%
Debt to Equity [4] 34.7% 26.7% 24.9% 29.5% 23.1% 20.5% 26.9% 30.3% 26.3%
- -----------------------------------------------------------------------------------------------------------------------------------
Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
For the Quarter Ended 1998 1998 1998 1998 1999 1999 1999 1999 2000 2000 2000 2000
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Common Stock:
Highest Price 43.250 47.063 49.438 43.344 50.250 53.438 57.500 48.313 41.375 40.063 56.375 50.938
Lowest Price 36.125 41.844 41.125 33.500 39.281 45.688 36.000 36.500 22.625 29.000 35.625 40.875
Closing Price 42.625 45.688 41.125 40.906 49.438 52.313 37.563 40.000 33.500 36.125 48.125 47.313
Yield [3] 2.4% 2.3% 2.5% 2.7% 2.2% 2.1% 2.9% 2.9% 3.5% 3.2% 2.4% 2.6%
Preferred Stock Dividend 0.026 0.026 0.026 0.023 0.024 0.024 0.027 0.014 0.022 0.022 0.021 0.013
(Millions)
Debt: (End of Period)
Senior Debt Ratings
A.M. Best a a
Fitch AA- AA- A+ A+ A+ A+ A+ A+ A+ A+ A+ A+
Moody's A2 A2 A2 A2 A2 A2 A2 A2 A2 A2 A2 A3
Standard and Poors A A- A- A- A- A- A- A- A- A- A- A-
Claims Paying Ratings:
Lincoln Life - A.M. Best A+ A+ A+ A A A A A A A A A
Lincoln Life - Fitch AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA
Lincoln Life - Moody's Aa3 Aa3 Aa3 Aa3 Aa3 Aa3 Aa3 Aa3 Aa3 Aa3 Aa3 Aa3
Lincoln Life -
Standard & Poors AA- AA- AA- AA- AA- AA- AA- AA- AA- AA- AA- AA-
First Penn - A.M. Best* A+ A+ A+ A A A A A A A A A
First Penn - Moody's A1 A1 A1 A1 A1 A1 A1 A1 A1 A1 A1 A1
First Penn -
Standard & Poors* AA- AA- AA- AA- AA- AA- AA- AA- AA- AA- AA- AA-
LLA of New York -
A.M. Best* A+ A+ A+ A A A A A A A A A
LLA of New York - Fitch* AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA
LLA of New York - Moody's A1 A1 A1 A1 A1 A1 A1 A1 A1 A1 A1 A1
LLA of New York -
Standard & Poors* AA- AA- AA- AA- AA- AA- AA- AA- AA- AA- AA- AA-
Ratios
Debt to Total
Capitalization [4] 22.0% 20.5% 21.9% 21.2% 20.7% 22.0% 22.0% 23.2% 23.3% 21.8% 21.2% 20.8%
Debt to Equity [4] 28.2% 25.8% 28.1% 26.9% 26.2% 28.2% 28.3% 30.3% 30.4% 28.0% 27.0% 26.3%
* Rating based on affiliation with Lincoln Life
[1] Stock prices shown above include 2-for-1 splits in June 1993, and June 1999
[2] Indicated dividend divided by net income
[3] Indicated dividend divided by the closing price
[4] Equity used in calculation assumes securities at cost. Minority interest-preferred securities
of subsidiary companies (hybrid securities) are considered 50% debt and 50% equity.
Return on Equity/Return on Capital:
In order to accommodate the various perspectives, LNC presents three separate Return on Equity numbers on pages 2 and 3
of this Statistical Report. "Net Income Divided by Average Shareholders' Equity" tends to fluctuate from period to period due
to the realization of gains on the sale of investments or subsidiaries during one period and the planned generation of losses
in another period for purposes of recovering Federal Taxes previously paid. "Income from Operations Divided by Average
Shareholders' Equity" is less volatile but leaves out an important element of earnings for a company that has a long-term goal
of enhancing shareholder value by realizing investment gains. "Adjusted Income from Operations Divided by Adjusted
Shareholders' Equity" amortizes: 1) realized security gains on investments 2) unrealized gains on equity securities over
approximately five years and eliminates amortization of goodwill related to acquisitions.
Return on capital measures the effectiveness of LNC's use of its total capital, which is made up of equity, debt and hybrid
securities. Return on capital is calculated by dividing income from operations (after adding back after-tax interest expense)
by average capital. The difference between return on capital and return on equity presents the effect of leveraging on LNC's
consolidated results.