8-K - LNC - Equibles

UNITED STATES‎SECURITIES AND EXCHANGE COMMISSION‎Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

November 4, 2020

Date of Report (Date of earliest event reported)

Lincoln National Corporation

(Exact name of registrant as specified in its charter)

Indiana	1-6028	35-1140070
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

150 N. Radnor Chester Road, Radnor, PA 19087

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (484) 583-1400

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

__________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock	LNC	New York Stock Exchange

__________________________________

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

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Item 2.02. Results of Operations and Financial Condition.

On November 4, 2020, Lincoln National Corporation (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2020, a copy of which is attached as Exhibit 99.1 and is incorporated herein by reference. The Company’s statistical supplement for the quarter ended September 30, 2020, is attached as Exhibit 99.2 and is incorporated herein by reference.

The information, including exhibits attached hereto, furnished under this Item 2.02 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.

Item 9.01. Financial Statements and Exhibits.

(d)Exhibits.

The following exhibits are being furnished with this Form 8-K.

Exhibit<br><br>Number	Description
99.1	Press release dated November 4, 2020, announcing Lincoln National Corporation’s financial results for the quarter ended September 30, 2020.
99.2	Lincoln National Corporation Statistical Supplement for the quarter ended September 30, 2020.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

LINCOLN NATIONAL CORPORATION
By	/s/ Christine A. Janofsky
Name:	Christine A. Janofsky
Title:	Senior Vice President and
	Chief Accounting Officer

Date: November 4, 2020

		3Q20 - Press Release

FOR IMMEDIATE RELEASE

Lincoln Financial Group reports THIRD Quarter 2020 Results

AND Announces increase to dividend

_______________________________________ | v | Net income EPS of $2.01 and adjusted operating EPS of $(0.72) | | --- | --- | | v | Adjusted operating EPS included $(3.07) from notable items, elevated claims experience from COVID-19, and above targeted alternative investment income | | --- | --- | | v | BVPS, including AOCI, of $111.51, up 11%; BVPS, excluding AOCI, of $71.10, up 3% | | --- | --- | | v | Resuming buybacks in fourth quarter and increased quarterly common stock dividend to $0.42, up 5% | | --- | --- |

Radnor, PA, November 4, 2020 – Lincoln Financial Group (NYSE: LNC) today reported net income for the third quarter of 2020 of $398 million, or $2.01 per diluted share available to common stockholders, compared to net loss in the third quarter of 2019 of $(161) million, or $(0.83) per diluted share available to common stockholders. Third quarter adjusted loss from operations was $(133) million, or $(0.72) per diluted share available to common stockholders, compared to adjusted loss from operations of $(46) million, or $(0.25) per diluted share available to common stockholders, in the third quarter of 2019.

The current quarter’s adjusted operating results included net unfavorable notable items of $552 million, or $2.84 per share, primarily related to the company’s annual review of DAC and reserve assumptions. The prior-year quarter included net unfavorable notable items of $403 million, or $2.00 per share, related to the company’s annual review of DAC and reserve assumptions.

“Third quarter results were impacted by our annual review process, predominantly from adjustments to our interest rate assumptions, and elevated claims related to the pandemic,” said Dennis R. Glass, president and CEO of Lincoln Financial Group. “Importantly, excluding these factors, our operating results would have been consistent with our strong track record of financial performance. Our focus on achieving targeted returns on capital has slowed sales momentum and our reprice, shift and add new product strategy positions us to achieve sales growth in 2021. Additionally, we are resuming buybacks in the fourth quarter, and the board approved an increase in our dividend per share, reflecting our strong balance sheet and positive outlook.”

1 Due to reporting a net loss for the three months ended September 30, 2019 and an adjusted loss from operations for the three months ended September 30, 2019 and September 30, 2020, basic shares were used in the diluted EPS and adjusted diluted EPS calculations for those periods as the use of diluted shares would have resulted in a lower loss per share

The board of directors of Lincoln National Corporation approved raising the quarterly dividend on its common shares to $0.42 per share. The dividend represents an 5% increase over the prior-year level. The increased dividend on common stock will be payable on February 1, 2021 to shareholders of record at the close of business on January 11, 2021.

| | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | As of or For the | | | | As of or For the | | | | | | Quarter Ended | | | | Nine Months Ended | | | | | | September 30, | | | | September 30, | | | | | (in millions, except per share data) | 2020 | | 2019 | | 2020 | | 2019 | | | Net Income (Loss) | $ | 398 | $ | (161) | $ | 356 | $ | 454 | | Net Income (Loss) Available to Common Stockholders | | 393 | | (164) | | 340 | | 454 | | Net Income (Loss) per Diluted Share Available to Common Stockholders(1) | | 2.01 | | (0.83) | | 1.74 | | 2.24 | | Revenues | | 5,361 | | 4,638 | | 13,303 | | 12,913 | | Adjusted Income (Loss) from Operations | | (133) | | (46) | | 519 | | 873 | | Adjusted Income (Loss) from Operations per Diluted Share Available to | | | | | | | | | | Common Stockholders | | (0.72) | | (0.25) | | 2.57 | | 4.30 | | Average Diluted Shares | | 195.4 | | 201.6 | | 195.9 | | 203.1 | | Return on Equity (ROE), Including Accumulated Other Comprehensive | | | | | | | | | | Income (AOCI) (Net Income) | | 7.5% | | -3.4% | | 2.5% | | 3.5% | | Adjusted Operating ROE, Excluding AOCI (Income from Operations) | | -3.9% | | -1.3% | | 5.1% | | 8.3% | | Book Value per Share, Including AOCI | $ | 111.51 | $ | 100.84 | $ | 111.51 | $ | 100.84 | | Book Value per Share, Excluding AOCI | | 71.10 | | 69.33 | | 71.10 | | 69.33 |

Operating Highlights – Third Quarter 2020 vs Third Quarter 2019 | · | Average account values of $279 billion, up 7% | | --- | --- | | · | Sales of variable annuities without guaranteed living benefits of $1.9 billion, up 60% | | --- | --- | | · | Retirement Plan Services net flows of $362 million, up 33% | | --- | --- | | · | Life Insurance expense ratio improved 40 basis points | | --- | --- | | · | Group Protection insurance premiums of $1.1 billion, up 3% | | --- | --- |

In addition to the net unfavorable notable items of $2.84, this quarter’s adjusted operating EPS results included an estimated unfavorable impact of $0.52 from elevated claims experience related to the pandemic and a favorable impact of $0.29 from alternative investment income above targeted levels.

Third Quarter 2020 – Segment Results

Annuities

Annuities reported income from operations of $196 million compared to $169 million in the prior-year quarter.

Impacts from the company’s annual review of DAC and reserve assumptions were unfavorable in both periods. Not including the impact from the reviews, income from operations increased 13% from the prior-year quarter primarily driven by higher average account values and favorable returns within the company’s alternative investment portfolio.

Total annuity deposits of $2.5 billion were down 27% from the prior-year quarter. Variable annuity sales were up 1% versus the prior-year quarter, as a 60% increase in sales of products without guaranteed living benefits offset a decline in guaranteed living benefit product sales. Fixed annuity sales of $87 million compared to $1 billion in the prior-year period with the change due to product actions taken to reflect lower interest rates.

Net outflows were $283 million in the quarter, as positive net flows from variable annuities were more than offset by net outflows from fixed annuities. Average account values of $144 billion were up 8% over the prior-year quarter.

The current quarter included net unfavorable notable items of $101 million related to the company’s annual review of DAC and reserve assumptions while prior-year results included net unfavorable notable items of $93 million related to the company’s annual review of DAC and reserve assumptions.

Retirement Plan Services

Retirement Plan Services reported income from operations of $50 million, up 14% from the prior-year quarter with the increase primarily driven by favorable returns within the company’s alternative investment portfolio and expense management.

Total deposits for the quarter of $2.4 billion were up 6% from the prior-year quarter driven by a 20% increase in first-year sales and $1.5 billion in recurring deposits, in line with the prior-year quarter.

Net flows totaled $362 million, up 33% from the prior-year quarter. Average account values of $80 billion were up 7% over the prior-year quarter.

The current quarter included net unfavorable notable items of $3 million related to the company’s annual review of DAC and reserve assumptions while prior-year results had no notable items.

Life Insurance

Life Insurance reported a $311 million loss from operations compared to a loss from operations of $245 million in the prior-year quarter. Impacts from the company’s annual review of DAC and reserve assumptions were unfavorable in both periods. Not including the impact of the reviews, income from operations increased from the prior-year quarter as

unfavorable mortality related to COVID-19 was more than offset by favorable returns within the company’s alternative investment portfolio.

Total Life Insurance sales of $186 million were down 21% from the prior-year quarter, a result of repricing actions to reflect the lower interest rate environment.

Total Life Insurance in-force of $878 billion grew 10% over the prior-year quarter, and average account values of $55 billion increased 5% over the same period.

The current quarter included net unfavorable notable items of $440 million related to the company’s annual review of DAC and reserve assumptions while prior year results included net unfavorable notable items of $320 million related to the company’s annual review of DAC and reserve assumptions.

Group Protection

Group Protection income from operations was $6 million in the quarter compared to $61 million in the prior-year period. Not including the impact from the annual review of reserve assumptions, the decline in income from operations was driven by unfavorable life mortality, primarily associated with the pandemic.

The total loss ratio was 83% in the current quarter compared to 74% in the prior-year quarter driven primarily by unfavorable life mortality.

Group Protection sales were $49 million compared to $242 million in the prior-year quarter with the decrease partially driven by timing of sales. Employee-paid sales represented 59% of total sales. Insurance premiums of $1.1 billion were up 3%.

The current quarter included net unfavorable notable items of $3 million related to the company’s annual review of reserve assumptions while prior-year results included net favorable notable items of $10 million related to the company’s annual review of reserve assumptions.

Other Operations

Other Operations reported a loss from operations of $74 million versus a loss of $75 million in the prior-year quarter.

The current quarter included net unfavorable notable items of $5 million related to elevated expenses while prior-year results had no notable items.

Realized Gains and Losses / Impacts to Net Income

Realized gains/losses and impacts to net income (after-tax) in the quarter were primarily driven by: | · | A $464 million gain associated with variable annuity GLB non-performance risk. | | --- | --- | | · | A $58 million non-operating gain related to the company’s annual review of DAC and reserve assumptions. | | --- | --- | | · | A $50 million gain associated with release of reserves for current expected credit losses. | | --- | --- |

Unrealized Gains and Losses

The company reported a net unrealized gain of $16.4 billion, pre-tax, on its available-for-sale securities at September 30, 2020. This compares to a net unrealized gain of $11.5 billion, pre-tax, at September 30, 2019, with the year-over-year increase primarily driven by lower treasury rates.

Share Count

The quarter’s average diluted share count of 195.4 million was down 3% from the third quarter of 2019, the result of repurchasing 5.5 million shares of stock since September 30, 2019. No shares were repurchased in the quarter.

Book Value

As of September 30, 2020, book value per share, including AOCI, increased 11% from the prior-year period to $111.51. Book value per share, excluding AOCI, increased 3% from the prior-year period to $71.10.

The tables attached to this release define and reconcile the non-GAAP measures adjusted income from operations, adjusted operating ROE and BVPS, excluding AOCI, to net income, ROE and BVPS, including AOCI, calculated in accordance with GAAP.

This press release contains statements that are forward-looking, and actual results may differ materially. Please see the Forward-looking Statements – Cautionary Language at the end of this release for factors that may cause actual results to differ materially from the company’s current expectations.

For other financial information, please refer to the company’s third quarter 2020 statistical supplement and earnings and investment portfolio supplement available on its website, http://www.lfg.com/investor.

Lincoln Financial Group will discuss the company’s third quarter results with investors in a conference call beginning at 10:00 a.m. Eastern Time on Thursday, November 5, 2020. The conference call will be broadcast live through the company website at www.lfg.com/webcast. Please log on at least fifteen minutes prior to the call to register and download any necessary streaming media software. To participate via phone: (866) 394-4575 (U.S./Canada) or (678) 509-7536 (International). Ask for the Lincoln National Conference Call.

A replay of the call will be available by 1:00 p.m. Eastern Time on November 5, 2020 at www.lfg.com/webcast. Audio replay will be available from 1:00 p.m. Eastern Time on November 5, 2020 through 12:00 p.m. Eastern Time on November 12, 2020. To access the re-broadcast, dial: (855) 859-2056 (Domestic) or (404) 537-3406 (International). Enter conference code: 5687777.

About Lincoln Financial Group

Lincoln Financial Group provides advice and solutions that help people take charge of their financial lives with confidence and optimism. Today, more than 17 million customers trust our retirement, insurance and wealth protection expertise to help address their lifestyle, savings and income goals, and guard against long-term care expenses. Headquartered in Radnor, Pennsylvania, Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. The company had $281 billion in end-of-period account values as of September 30, 2020. Lincoln Financial Group is a committed corporate citizen included on major sustainability indices including the Dow Jones Sustainability Index North America and FTSE4Good. Dedicated to diversity and inclusion, we earned perfect 100 percent scores on the Corporate Equality Index and the Disability Equality Index, and rank among Forbes’ World’s Best Employers, Best Large Employers, Best Employers for Diversity, and Best Employers for Women, and Newsweek’s Most Responsible Companies. Learn more at: www.LincolnFinancial.com. Follow us on Facebook, Twitter, LinkedIn, and Instagram. Sign up for email alerts at http://newsroom.lfg.com.

Contacts:Chris Giovanni Scott Sloat

(484) 583-1793(484) 583-1625

Investor Relations Media Relations

InvestorRelations@LFG.com scott.sloat@LFG.com

Explanatory Notes on Use of Non-GAAP Measures

Management believes that adjusted income from operations (adjusted operating income), adjusted operating return on equity, adjusted operating revenues, and adjusted operating EPS better explain the results of the company’s ongoing businesses in a manner that allows for a better understanding of the underlying trends in the company’s current business because the excluded items are unpredictable and not necessarily indicative of current operating fundamentals or future performance of the business segments, and, in most instances, decisions regarding these items do not necessarily relate to the operations of the individual segments. Management also believes that using book value excluding accumulated other comprehensive income (“AOCI”) enables investors to analyze the amount of our net worth that is primarily attributable to our business operations. Book value per share excluding AOCI is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period, primarily based on changes in interest rates.

For the historical periods, reconciliations of non-GAAP measures used in this press release to the most directly comparable GAAP measure may be included in this Appendix to the press release and/or are included in the Statistical Reports for the corresponding periods contained in the Earnings section of the Investor Relations page on our website: www.lfg.com/investor.

Definitions of Non-GAAP Measures Used in this Press Release

Adjusted income (loss) from operations, adjusted operating revenues and adjusted operating return on equity (including and excluding average goodwill within average equity), excluding AOCI, using annualized adjusted income (loss) from operations are financial measures we use to evaluate and assess our results. Adjusted income (loss) from operations, adjusted operating revenues and adjusted operating return on equity (“ROE”), as used in the press release, are non-GAAP financial measures and do not replace GAAP net income (loss), revenues and ROE, the most directly comparable GAAP measures.

Adjusted Income (Loss) from Operations

Adjusted income (loss) from operations is GAAP net income (loss) excluding the after-tax effects of the following items, as applicable:

| · | Realized gains and losses associated with the following (“excluded realized gain (loss)”): | | --- | --- | | o | Sales or disposals and impairments of financial assets; | | --- | --- | | o | Changes in the fair value of equity securities; | | --- | --- | | o | Changes in the fair value of derivatives, embedded derivatives within certain reinsurance arrangements and trading securities (“gain (loss) on the mark-to-market on certain instruments”); | | --- | --- | | o | Changes in the fair value of the derivatives we own to hedge our guaranteed death benefit (“GDB”) riders within our variable annuities; | | --- | --- | | o | Changes in the fair value of the embedded derivatives of our guaranteed living benefit (“GLB”) riders reflected within variable annuity net derivative results accounted for at fair value; | | --- | --- | | o | Changes in the fair value of the derivatives we own to hedge our GLB riders reflected within variable annuity net derivative results; and | | --- | --- | | o | Changes in the fair value of the embedded derivative liabilities related to index options we may purchase or sell in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products accounted for at fair value (“indexed annuity forward-starting options”); | | --- | --- | | · | Changes in reserves resulting from benefit ratio unlocking on our GDB and GLB riders (“benefit ratio unlocking”); | | --- | --- | | · | Income (loss) from reserve changes, net of related amortization, on business sold through reinsurance; | | --- | --- | | · | Gains (losses) on early extinguishment of debt; | | --- | --- | | · | Losses from the impairment of intangible assets; | | --- | --- | | · | Income (loss) from discontinued operations; | | --- | --- | | · | Acquisition and integration costs related to mergers and acquisitions; and | | --- | --- | | · | Income (loss) from the initial adoption of new accounting standards, regulations and policy changes including the net impact from the Tax Cuts and Jobs Act. | | --- | --- |

Adjusted Operating Revenues

Adjusted operating revenues represent GAAP revenues excluding the pre-tax effects of the following items, as applicable: | · | Excluded realized gain (loss); | | --- | --- | | · | Revenue adjustments from the initial adoption of new accounting standards; | | --- | --- | | · | Amortization of deferred front-end loads (“DFEL”) arising from changes in GDB and GLB benefit ratio unlocking; and | | --- | --- | | · | Amortization of deferred gains arising from reserve changes on business sold through reinsurance. | | --- | --- |

Adjusted Operating Return on Equity

Adjusted operating return on equity measures how efficiently we generate profits from the resources provided by our net assets. | · | It is calculated by dividing annualized adjusted income (loss) from operations by average equity, excluding accumulated other comprehensive income (loss) ("AOCI"). | | --- | --- | | · | Management evaluates return on equity by both including and excluding average goodwill within average equity. | | --- | --- |

Definition of Notable Items

Adjusted income (loss) from operations, excluding notable items, is a non-GAAP measure that excludes items which, in management’s view, do not reflect the company’s normal, ongoing operations. | · | We believe highlighting notable items included in adjusted income (loss) from operations enables investors to better understand the fundamental trends in its results of operations and financial condition. | | --- | --- |

Book Value Per Share, Excluding AOCI

Book value per share, excluding AOCI is calculated based upon a non-GAAP financial measure. | · | It is calculated by dividing (a) stockholders' equity, excluding AOCI by (b) common shares outstanding. | | --- | --- | | · | We provide book value per share excluding AOCI to enable investors to analyze the amount of our net worth that is primarily attributable to our business operations. | | --- | --- | | · | Management believes book value per share, excluding AOCI is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period, primarily based on changes in interest rates. | | --- | --- | | · | Book value per share is the most directly comparable GAAP measure. | | --- | --- |

Special Note

Sales

Sales as reported consist of the following: | · | Annuities and Retirement Plan Services – deposits from new and existing customers; | | --- | --- | | · | MoneyGuard® – 15% of total expected premium deposits; | | --- | --- | | · | Universal life (“UL”), indexed universal life (“IUL”), variable universal life (“VUL”) – first-year commissionable premiums plus 5% of excess premiums received; | | --- | --- | | · | Executive Benefits – single premium bank-owned UL and VUL, 15% of single premium deposits, and corporate-owned UL and VUL, first-year commissionable premiums plus 5% of excess premium received; | | --- | --- | | · | Term – 100% of annualized first-year premiums; and | | --- | --- | | · | Group Protection – annualized first-year premiums from new policies. | | --- | --- |

Lincoln National Corporation

Reconciliation of Net Income to Adjusted Income from Operations

| | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | For the | | | | For the | | | | | (in millions, except per share data) | Quarter Ended | | | | Nine Months Ended | | | | | | September 30, | | | | September 30, | | | | | | 2020 | | 2019 | | 2020 | | 2019 | | | | | | | | | | | | | Total Revenues | $ | 5,361 | $ | 4,638 | $ | 13,303 | $ | 12,913 | | Less: | | | | | | | | | | Excluded realized gain (loss) | | 572 | | (61) | | (198) | | (623) | | Amortization of DFEL on benefit ratio unlocking | | 1 | | 1 | | (6) | | 3 | | Total Adjusted Operating Revenues | $ | 4,788 | $ | 4,700 | $ | 13,507 | $ | 13,533 | | | | | | | | | | | | Net Income (Loss) Available to Common | | | | | | | | | | Stockholders – Diluted | $ | 393 | $ | (164) | $ | 340 | $ | 454 | | Less: | | | | | | | | | | Adjustment for deferred units of LNC stock in our | | | | | | | | | | deferred compensation plans (1) | | (5) | | (3) | | (16) | | - | | Net Income (Loss) | | 398 | | (161) | | 356 | | 454 | | Less: | | | | | | | | | | Excluded realized gain (loss), after-tax | | 452 | | (49) | | (156) | | (492) | | Benefit ratio unlocking, after-tax | | 83 | | (2) | | 17 | | 186 | | Acquisition and integration costs related to mergers | | | | | | | | | | and acquisitions, after-tax | | (4) | | (31) | | (12) | | (80) | | Gain (loss) on early extinguishment of debt, after-tax | | - | | (33) | | (12) | | (33) | | Total adjustments | | 531 | | (115) | | (163) | | (420) | | Adjusted Income (Loss) from Operations | $ | (133) | $ | (46) | $ | 519 | $ | 873 | | | | | | | | | | | | Earnings (Loss) Per Common Share – Diluted | | | | | | | | | | Net income (loss)(2) | $ | 2.01 | $ | (0.83) | $ | 1.74 | $ | 2.24 | | Adjusted income (loss) from operations | | (0.72) | | (0.25) | | 2.57 | | 4.30 | | | | | | | | | | | | Average Stockholders' Equity | | | | | | | | | | Average equity, including average AOCI | $ | 21,140 | $ | 19,227 | $ | 19,309 | $ | 17,349 | | Average AOCI | | 7,566 | | 5,292 | | 5,689 | | 3,372 | | Average equity, excluding AOCI | | 13,574 | | 13,935 | | 13,620 | | 13,977 | | Average goodwill | | 1,778 | | 1,778 | | 1,778 | | 1,779 | | Average equity, excluding AOCI and goodwill | $ | 11,796 | $ | 12,157 | $ | 11,842 | $ | 12,198 | | | | | | | | | | | | Return on Equity, Including AOCI | | | | | | | | | | Net income (loss) with average equity including goodwill | | 7.5% | | -3.4% | | 2.5% | | 3.5% | | | | | | | | | | | | Adjusted Operating Return on Equity, Excluding AOCI | | | | | | | | | | Adjusted income (loss) from operations with average equity | | | | | | | | | | including goodwill | | -3.9% | | -1.3% | | 5.1% | | 8.3% | | Adjusted income (loss) from operations with average equity | | | | | | | | | | excluding goodwill | | -4.5% | | -1.5% | | 5.8% | | 9.5% | | | | | | | | | | | | (1) The numerator used in the calculation of our diluted EPS is adjusted to remove the mark-to-market adjustment for deferred units of LNC | | | | | | | | | | stock in our deferred compensation plans if the effect of equity classification would result in a more dilutive EPS. | | | | | | | | | | | | | | | | | | | | (2) Due to reporting a net loss for the three months ended September 30, 2019 and an adjusted loss from operations for the three months | | | | | | | | | | ended September 30, 2019 and September 30, 2020, basic shares were used in the diluted EPS and adjusted diluted EPS calculations | | | | | | | | | | for those periods as the us of diluted shares would have resulted in a lower loss per share. | | | | | | | | | | | | | | | | | | |

Lincoln National Corporation

Reconciliation of Book Value per Share

| | | | | | | --- | --- | --- | --- | --- | | | | | | | | | As of September 30, | | | | | | 2020 | | 2019 | | | Book value per share, including AOCI | $ | 111.51 | $ | 100.84 | | Per share impact of AOCI | | 40.41 | | 31.51 | | Book value per share, excluding AOCI | | 71.10 | | 69.33 |

Lincoln National Corporation

Digest of Earnings

| | | | | | | --- | --- | --- | --- | --- | | | | | | | | | For the | | | | | (in millions, except per share data) | Quarter Ended | | | | | | September 30, | | | | | | 2020 | | 2019 | | | | | | | | | Revenues | $ | 5,361 | $ | 4,638 | | | | | | | | Net Income (Loss) | $ | 398 | $ | (161) | | Adjustment for deferred units of LNC stock in our | | | | | | deferred compensation plans (1) | | (5) | | (3) | | Net Income (Loss) Available to Common | | | | | | Stockholders – Diluted | $ | 393 | $ | (164) | | | | | | | | Earnings (Loss) per Common Share – Basic | $ | 2.06 | $ | (0.81) | | Earnings (Loss) per Common Share – Diluted (2) | | 2.01 | | (0.83) | | | | | | | | Average Shares – Basic | 193,250,727 | | 199,200,811 | | | Average Shares – Diluted | 195,356,425 | | 201,561,178 | | | | | | | | | | For the | | | | | | Nine Months Ended | | | | | | September 30, | | | | | | 2020 | | 2019 | | | | | | | | | Revenues | $ | 13,303 | $ | 12,913 | | | | | | | | Net Income (Loss) | $ | 356 | $ | 454 | | Adjustment for deferred units of LNC stock in our | | | | | | deferred compensation plans (1) | | (16) | | - | | Net Income (Loss) Available to Common | | | | | | Stockholders – Diluted | $ | 340 | $ | 454 | | | | | | | | Earnings (Loss) per Common Share – Basic | $ | 1.84 | $ | 2.25 | | Earnings (Loss) per Common Share – Diluted (2) | | 1.74 | | 2.24 | | | | | | | | Average Shares – Basic | 193,849,829 | | 201,644,591 | | | Average Shares – Diluted | 195,940,941 | | 203,135,457 | | | | | | | | | | | | | | | (1) The numerator used in the calculation of our diluted EPS is adjusted to remove the mark-to-market adjustment for deferred units of LNC | | | | | | stock in our deferred compensation plans if the effect of equity classification would be more dilutive to our diluted EPS. | | | | | | (2) Due to reporting a net loss for the three months ended September 30, 2019, basic shares were used in the diluted EPS calculation for these | | | | | | periods as the use of diluted shares would have resulted in a lower loss per share. | | | | | | | | | | | | | | | | |

Forward Looking Statements — Cautionary Language

Certain statements made in this press release and in other written or oral statements made by Lincoln or on Lincoln's behalf are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). A forward-looking statement is a statement that is not a historical fact and, without limitation, includes any statement that may predict, forecast, indicate or imply future results, performance or achievements. Forward-looking statements may contain words like: "anticipate," "believe," "estimate," "expect," "project," "shall," "will," and other words or phrases with similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, trends in Lincoln's businesses, prospective services or products, future performance or financial results, and the outcome of contingencies, such as legal proceedings. Lincoln claims the protection afforded by the safe harbor for forward-looking statements provided by the PSLRA.

Forward-looking statements are subject to risks and uncertainties. Actual results could differ materially from those expressed in or implied by such forward-looking statements due to a variety of factors, including:

| · | The continuation of the COVID-19 pandemic, or future outbreaks of COVID-19, and uncertainty surrounding the length and severity of future impacts on the global economy and on our business, results of operations and financial condition; | | --- | --- | | · | Further deterioration in general economic and business conditions that may affect account values, investment results, guaranteed benefit liabilities, premium levels and claims experience; | | --- | --- | | · | Adverse global capital and credit market conditions could affect our ability to raise capital, if necessary, and may cause us to realize impairments on investments and certain intangible assets, including goodwill and the valuation allowance against deferred tax assets, which may reduce future earnings and/or affect our financial condition and ability to raise additional capital or refinance existing debt as it matures; | | --- | --- | | · | Because of our holding company structure, the inability of our subsidiaries to pay dividends to the holding company in sufficient amounts could harm the holding company’s ability to meet its obligations; | | --- | --- | | · | Legislative, regulatory or tax changes, both domestic and foreign, that affect: the cost of, or demand for, our subsidiaries' products; the required amount of reserves and/or surplus; our ability to conduct business and our captive reinsurance arrangements as well as restrictions on the payment of revenue sharing and 12b-1 distribution fees; the impact of U.S. federal tax reform legislation on our business, earnings and capital; and the impact of any “best interest” standards of care adopted by the Securities and Exchange Commission (“SEC”) or other regulations adopted by federal or state regulators or self-regulatory organizations relating to the standard of care owed by investment advisers and/or broker dealers; | | --- | --- | | · | Actions taken by reinsurers to raise rates on in-force business; | | --- | --- | | · | Further declines in or sustained low interest rates causing a reduction in investment income, the interest margins of our businesses, estimated gross profits and demand for our products; | | --- | --- | | · | Rapidly increasing interest rates causing contract holders to surrender life insurance and annuity policies, thereby causing realized investment losses, and reduced hedge performance related to variable annuities; | | --- | --- | | · | Uncertainty about the effect of continuing promulgation and implementation of rules and regulations under the Dodd-Frank Wall Street Reform and Consumer Protection Act on us, the economy and the financial services sector in particular; | | --- | --- | | · | The initiation of legal or regulatory proceedings against us, and the outcome of any legal or regulatory proceedings, such as: adverse actions related to present or past business practices common in businesses in which we compete; adverse decisions in significant actions including, but not limited to, actions brought by federal and state authorities and class action cases; new decisions that result in changes in law; and unexpected trial court rulings; | | --- | --- | | · | A decline or continued volatility in the equity markets causing a reduction in the sales of our subsidiaries' products; a reduction of asset-based fees that our subsidiaries charge on various investment and insurance products; an acceleration of the net amortization of deferred acquisition costs ("DAC"), value of business acquired ("VOBA"), deferred sales inducements ("DSI") and deferred front-end loads ("DFEL"); and an increase in liabilities related to guaranteed benefit features of our subsidiaries' variable annuity products; | | --- | --- | | · | Ineffectiveness of our risk management policies and procedures, including various hedging strategies used to offset the effect of changes in the value of liabilities due to changes in the level and volatility of the equity markets and interest rates; | | --- | --- | | · | A deviation in actual experience regarding future persistency, mortality, morbidity, interest rates or equity market returns from the assumptions used in pricing our subsidiaries' products, in establishing related insurance reserves and in the net amortization of DAC, VOBA, DSI and DFEL, which may reduce future earnings; | | --- | --- | | · | Changes in accounting principles that may affect our financial statements; | | --- | --- | | · | Lowering of one or more of our debt ratings issued by nationally recognized statistical rating organizations and the adverse effect such action may have on our ability to raise capital and on our liquidity and financial condition; | | --- | --- | | · | Lowering of one or more of the insurer financial strength ratings of our insurance subsidiaries and the adverse effect such action may have on the premium writings, policy retention, profitability of our insurance subsidiaries and liquidity; | | --- | --- | | · | Significant credit, accounting, fraud, corporate governance or other issues that may adversely affect the value of certain financial assets, as well as counterparties to which we are exposed to credit risk requiring that we realize losses on financial assets; | | --- | --- | | · | Inability to protect our intellectual property rights or claims of infringement of the intellectual property rights of others; | | --- | --- | | · | Interruption in telecommunication, information technology or other operational systems, or failure to safeguard the confidentiality or privacy of sensitive data on such systems from cyberattacks or other breaches of our data security systems; | | --- | --- | | · | The effect of acquisitions and divestitures, restructurings, product withdrawals and other unusual items, including the successful implementation of integration strategies or the achievement of anticipated synergies and operational efficiencies related to an acquisition; | | --- | --- | | · | The adequacy and collectability of reinsurance that we have purchased; | | --- | --- | | · | The continuation of the COVID-19 pandemic, or future outbreaks of COVID-19 or other pandemics, acts of terrorism, war or other man-made and natural catastrophes that may adversely affect our businesses and the cost and availability of reinsurance; | | --- | --- | | · | Competitive conditions, including pricing pressures, new product offerings and the emergence of new competitors, that may affect the level of premiums and fees that our subsidiaries can charge for their products; | | --- | --- | | · | The unknown effect on our subsidiaries' businesses resulting from evolving market preferences and the changing demographics of our client base; and | | --- | --- | | · | The unanticipated loss of key management, financial planners or wholesalers. | | --- | --- |

The risks and uncertainties included here are not exhaustive. Our most recent Form 10-K and our Form 10-Q for the quarter ended March 31, 2020, as well as other reports that we file with the SEC, include additional factors that could affect our businesses and financial performance. Moreover, we operate in a rapidly changing and competitive environment. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors.

Further, it is not possible to assess the effect of all risk factors on our businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. In addition, Lincoln disclaims any obligation to update any forward-looking statements to reflect events or circumstances that occur after the date of this press release.

The reporting of Risk Based Capital (“RBC”) measures is not intended for the purpose of ranking any insurance company or for use in connection with any marketing, advertising or promotional activities.

		3Q20 - Stat Supp


	Lincoln Financial Group
	Table of Contents


	Analyst Coverage and Credit Ratings	1
	Notes	2
	Consolidated
	Consolidated Statements of Income (Loss)	3
	Consolidated Balance Sheets	4
	Earnings, Shares and Return on Equity	5
	Key Stakeholder Metrics	6
	Segment and Sources of Earnings	7
	Select Earnings Drivers By Segment	8
	Sales By Segment	9
	Operating Revenues and General and Administrative Expenses By Segment	10
	Operating Commissions and Other Expenses	11
	Interest Rate Yields and Spreads By Segment	12
	Select Earnings and Operational Data from Business Segments
	Annuities	13
	Retirement Plan Services	14
	Life Insurance	15
	Group Protection	16
	Other Operations	17
	DAC & Account Value Rollforwards
	Consolidated DAC, VOBA, DSI and DFEL Roll Forwards	18
	Account Value Roll Forwards:
	Annuities	19
	Retirement Plan Services	20
	Life Insurance	21
	Other Information
	Select Investment Data	22
	Realized Gain (Loss) and Benefit Ratio Unlocking, After-DAC	23
	Select GAAP to Non-GAAP Reconciliations	24

| | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | Lincoln Financial Group | | | | | | | | | Analyst Coverage and Credit Ratings | | | | | | | | | | | | | | | | | | | | | | | | | | | Firm | Analyst | | | | Phone Number | | | | Autonomous Research U.S., L.P. | Erik Bass | | | | | 646-561-6248 | | | B. Riley FBR | Randy Binner | | | | | 703-312-1890 | | | Bank of America | Joshua Shanker | | | | | 646-855-5716 | | | Citi Research | Suneet Kamath | | | | | 212-816-3457 | | | Credit Suisse | Andrew Kligerman | | | | | 212-325-5069 | | | Dowling & Partners | Humphrey Lee | | | | | 860-676-7324 | | | Evercore | Thomas Gallagher | | | | | 212-446-9439 | | | J.P. Morgan Securities | Jimmy Bhullar | | | | | 212-622-6397 | | | Keefe, Bruyette & Woods, Inc. | Ryan Krueger | | | | | 860-722-5930 | | | Morgan Stanley | Nigel Dally | | | | | 212-761-4132 | | | Piper Sandler & Co. | John Barnidge | | | | | 312-281-3412 | | | RBC Capital Markets | Mark Dwelle | | | | | 804-782-4008 | | | Wells Fargo | Elyse Greenspan | | | | | 212-214-8031 | | | | | | | | | | | | This list is provided for informational purposes only. Lincoln Financial Group does not endorse the analyses, conclusions or recommendations contained in any report issued by these | | | | | | | | | or any other analysts. | | | | | | | | | | | | | | | | | | | | Ratings as of November 4, 2020 | | | | | | | | | | | | | Standard | | | | | A.M Best | Fitch | Moody's | | & Poor's | | | Senior Debt Ratings | | a- | BBB+ | Baa1 | | A- | | | Financial Strength Ratings | | | | | | | | | The Lincoln National Life Insurance Company | | A+ | A+ | A1 | | AA- | | | First Penn-Pacific Life Insurance Company | | A | A+ | A1 | | A- | | | Lincoln Life & Annuity Company of New York | | A+ | A+ | A1 | | AA- | | | Lincoln Life Assurance Company of Boston | | A+ | | | | AA- | | | | | | | | | | | | Investor Inquiries May Be Directed To: | | | | | | | | | Chris Giovanni, Senior Vice President, Corporate Treasurer | | | | | | | | | Email: Christopher.Giovanni@lfg.com | | | | | | | | | Phone: 484-583-1793 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Page 1 | | | | | | |

|  |  |

| --- | --- | | | Lincoln Financial Group | | | Notes | | | | | | | | | Computations | | | • The quarterly financial information for the current year may not sum to the corresponding year-to-date amount as both are rounded to millions. | | | • The financial ratios reported herein are calculated using whole dollars instead of dollars rounded to millions. | | | • If the effect of equity classification would result in a more dilutive Earnings Per Share (“EPS”), the numerator used in the calculation of our diluted EPS is adjusted to remove the mark-to-market | | | adjustment for deferred units of LNC stock in our deferred compensation plans. In addition, for any period where a net loss or adjusted loss from operations is experienced, shares used in the diluted EPS | | | calculation represent basic shares, as the use of diluted shares would result in a lower loss per share. | | | • Return on equity (“ROE”) measures how efficiently we generate profits from the resources provided by our net assets. ROE is calculated by dividing annualized net income (loss) (or adjusted income (loss) | | | from operations) by average equity, excluding accumulated other comprehensive income (loss) (“AOCI”). Management evaluates consolidated ROE by both including and excluding the effect | | | of average goodwill. | | | • Book value per share, excluding AOCI, is calculated by dividing stockholders’ equity, excluding AOCI, by common shares outstanding. We provide book value per share, excluding AOCI, to enable | | | investors to analyze the amount of our net worth that is attributable primarily to our business operations. Management believes book value per share excluding AOCI is useful to investors because | | | it eliminates the effect of items that can fluctuate significantly from period to period, primarily based on changes in interest rates. Book value per share is the most directly comparable GAAP measure. | | | • Pre-tax net margin is calculated by dividing adjusted income (loss) from operations before taxes by net revenue, which is defined as total adjusted operating revenues less interest credited. | | | | | | Definitions | | | Holding company available liquidity consists of cash and invested cash, excluding cash held as collateral, and certain short-term investments that can be readily converted into cash, net of commercial | | | paper outstanding. | | | Sales as reported consist of the following: | | | • Annuities and Retirement Plan Services – deposits from new and existing customers; | | | • MoneyGuard®, our linked-benefit product – 15% of total expected premium deposits; | | | • Universal life (“UL”), indexed universal life (“IUL”), variable universal life (“VUL”) – first-year commissionable premiums plus 5% of excess premiums received; | | | • Executive Benefits – single premium bank-owned UL and VUL, 15% of single premium deposits, and corporate-owned UL and VUL, first-year commissionable premiums plus 5% of excess | | | premium received; | | | • Term – 100% of annualized first-year premiums; and | | | • Group Protection – annualized first-year premiums from new policies. | | | Throughout the document, “after-DAC” refers to the associated amortization expense of deferred acquisition costs (“DAC”), value of business acquired (“VOBA”), deferred sales inducements (“DSI”) | | | and deferred front-end loads (“DFEL”) and changes in other contract holder funds. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Page 2a |


	Lincoln Financial Group
	Notes


	Sources of earnings are defined as follows:
	• Investment spread earnings consist primarily of net investment income, net of interest credited earned on the underlying general account investments supporting our fixed products less related
	expenses.
	• Mortality/morbidity earnings result from mortality margins, morbidity margins, and certain expense assessments and related fees that are a function of the rates priced into the product and level
	of insurance in force.
	• Fees on assets under management (“AUM”) earnings results consist primarily of asset-based fees charged based on variable account values less associated benefits and related expenses.
	• Variable annuity (“VA”) riders earnings consist of fees charged to the contract holder related to guaranteed benefit rider features, less the net valuation premium and associated change in
	benefit reserves and related expenses.

	Non-GAAP Performance Measures
	Non-GAAP measures do not replace the most directly comparable GAAP measures, and we have included detailed reconciliations herein.
	Adjusted income (loss) from operations is GAAP net income excluding the after-tax effects of the following items, as applicable:
	• Realized gains and losses associated with the following (“excluded realized gain (loss)”):
	▪ Sales or disposals and impairments of financial assets;
	▪ Changes in the fair value of equity securities;
	▪ Changes in the fair value of derivatives, embedded derivatives within certain reinsurance arrangements and trading securities (“gain (loss) on the mark-to-market on certain instruments”);
	▪ Changes in the fair value of the derivatives we own to hedge our guaranteed death benefit (“GDB”) riders within our variable annuities;
	▪ Changes in the fair value of the embedded derivatives of our guaranteed living benefit (“GLB”) riders reflected within variable annuity net derivative results accounted for at fair value;
	▪ Changes in the fair value of the derivatives we own to hedge our GLB riders reflected within variable annuity net derivative results; and
	▪ Changes in the fair value of the embedded derivative liabilities related to index options we may purchase or sell in the future to hedge contract holder index allocations applicable to
	future reset periods for our indexed annuity products accounted for at fair value (“indexed annuity forward-starting options”);
	• Changes in reserves resulting from benefit ratio unlocking on our GDB and GLB riders (“benefit ratio unlocking”);
	• Income (loss) from reserve changes, net of related amortization, on business sold through reinsurance;
	• Gains (losses) on early extinguishment of debt;
	• Losses from the impairment of intangible assets;
	• Income (loss) from discontinued operations;
	• Acquisition and integration costs related to mergers and acquisitions; and
	• Income (loss) from the initial adoption of new accounting standards, regulations and policy changes including the net impact from the Tax Cuts and Jobs Act.
	Adjusted operating revenues represent GAAP revenues excluding the pre-tax effects of the following items, as applicable:
	• Excluded realized gain (loss);
	• Revenue adjustments from the initial adoption of new accounting standards;
	• Amortization of DFEL arising from changes in GDB and GLB benefit ratio unlocking; and
	• Amortization of deferred gains arising from reserve changes on business sold through reinsurance.




	Page 2b


	Lincoln Financial Group
	Notes


	Management believes that the non-GAAP performance measures previously discussed explain the results of our ongoing businesses in a manner that allows for a better understanding of the underlying
	trends in our current business as the excluded items are unpredictable and not necessarily indicative of current operating fundamentals or future performance of the business segments, and, in many
	instances, decisions regarding these items do not necessarily relate to the operations of the individual segments. In addition, we believe that our definitions of adjusted operating revenues and adjusted
	income from operations provide investors with more valuable measures of our performance as they better reveal trends in our business.

	Statistical Supplement is Dated
	The financial data in this document is dated November 4, 2020, and has not been updated since that date. Lincoln Financial Group does not intend to update this document.






























	Page 2c


Lincoln Financial Group
Consolidated Statements of Income (Loss)
Unaudited (millions of dollars, except per share data)

	For the Three Months Ended											For the Nine Months Ended
	9/30/19		12/31/19		3/31/20		6/30/20		9/30/20		Change	9/30/19		9/30/20		Change
Revenues
Insurance premiums	$	1,325	$	1,344	$	1,373	$	1,342	$	1,293	-2.4%	$	4,170	$	4,008	-3.9%
Fee income		1,934		1,572		1,539		1,458		1,815	-6.2%		4,925		4,812	-2.3%
Net investment income		1,235		1,381		1,375		1,172		1,458	18.1%		3,842		4,005	4.2%
Realized gain (loss):
Other-than-temporary impairment (“OTTI”)		(2)		(1)		-		-		-	100.0%		(14)		-	100.0%
Realized gain (loss), excluding OTTI		(9)		(118)		(24)		(647)		629	NM		(477)		(43)	91.0%
Total realized gain (loss)		(11)		(119)		(24)		(647)		629	NM		(491)		(43)	91.2%
Amortization of deferred gains on business
sold through reinsurance		8		7		11		11		11	37.5%		23		32	39.1%
Other revenues		147		159		151		181		155	5.4%		444		489	10.1%
Total revenues		4,638		4,344		4,425		3,517		5,361	15.6%		12,913		13,303	3.0%

Expenses
Interest credited		705		717		725		732		732	3.8%		2,063		2,189	6.1%
Benefits		2,502		1,768		2,501		1,725		2,484	-0.7%		6,112		6,710	9.8%
Commissions and other expenses		1,552		1,288		1,085		1,123		1,599	3.0%		3,999		3,807	-4.8%
Interest and debt expense		113		72		68		84		66	-41.6%		254		218	-14.2%
Strategic digitization expense		16		18		12		14		20	25.0%		47		45	-4.3%
Total expenses		4,888		3,863		4,391		3,678		4,901	0.3%		12,475		12,969	4.0%
Income (loss) before taxes		(250)		481		34		(161)		460	284.0%		438		334	-23.7%
Federal income tax expense (benefit)		(89)		50		(18)		(67)		62	169.7%		(16)		(22)	-37.5%
Net income (loss)		(161)		431		52		(94)		398	NM		454		356	-21.6%
Adjustment for LNC stock units in our
deferred compensation plans		(3)		(1)		(23)		-		(5)	-66.7%		-		(16)	NM
Net income (loss) available to common
stockholders – diluted	$	(164)	$	430	$	29	$	(94)	$	393	NM	$	454	$	340	-25.1%

Earnings (Loss) Per Common Share – Diluted
Net income (loss)	$	(0.83)	$	2.15	$	0.15	$	(0.49)	$	2.01	NM	$	2.24	$	1.74	-22.3%

ROE, including AOCI
Net income (loss)		-3.4%		8.7%		1.1%		-2.0%		7.5%			3.5%		2.5%



Page 3


Lincoln Financial Group
Consolidated Balance Sheets
Unaudited (millions of dollars)

	As of
	9/30/19		12/31/19		3/31/20		6/30/20		9/30/20		Change
ASSETS
Investments:
Fixed maturity available-for-sale (“AFS”) securities, net of allowance for
credit losses:
Corporate bonds	$	87,910	$	88,716	$	85,797	$	95,390	$	98,717	12.3%
U.S. government bonds		438		435		482		504		496	13.2%
State and municipal bonds		5,800		5,884		5,906		6,393		6,774	16.8%
Foreign government bonds		444		393		389		436		436	-1.8%
Residential mortgage-backed securities		3,287		3,241		3,271		3,272		3,203	-2.6%
Commercial mortgage-backed securities		1,033		1,083		1,119		1,226		1,430	38.4%
Asset-backed securities		4,172		4,889		5,086		5,716		6,590	58.0%
Hybrid and redeemable preferred securities		575		559		556		582		606	5.4%
Total fixed maturity AFS securities, net of allowance for credit losses		103,659		105,200		102,606		113,519		118,252	14.1%
Trading securities		4,691		4,673		4,019		4,651		4,633	-1.2%
Equity securities		158		103		83		87		122	-22.8%
Mortgage loans on real estate, net of allowance for credit losses		15,947		16,339		16,791		16,578		16,541	3.7%
Policy loans		2,475		2,477		2,571		2,551		2,527	2.1%
Derivative investments		2,201		1,911		4,417		2,957		3,236	47.0%
Other investments		3,389		2,994		4,765		4,574		4,204	24.0%
Total investments		132,520		133,697		135,252		144,917		149,515	12.8%
Cash and invested cash		2,939		2,563		6,202		4,201		2,595	-11.7%
DAC and VOBA		7,492		7,694		9,212		7,012		6,307	-15.8%
Premiums and fees receivable		440		465		562		490		498	13.2%
Accrued investment income		1,182		1,148		1,185		1,168		1,320	11.7%
Reinsurance recoverables, net of allowance for credit losses		17,353		17,144		16,923		16,866		16,610	-4.3%
Reinsurance related embedded derivatives		-		-		137		-		-	NM
Funds withheld reinsurance assets		543		536		535		535		539	-0.7%
Goodwill		1,778		1,778		1,778		1,778		1,778	0.0%
Other assets		15,939		16,170		16,246		15,905		15,667	-1.7%
Separate account assets		145,092		153,566		130,617		146,787		152,975	5.4%
Total assets	$	325,278	$	334,761	$	318,649	$	339,659	$	347,804	6.9%
		`



Page 4a

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Lincoln Financial Group | | | | | | | | | | | | | | Consolidated Balance Sheets | | | | | | | | | | | | | | Unaudited (millions of dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of | | | | | | | | | | | | | | 9/30/19 | | 12/31/19 | | 3/31/20 | | 6/30/20 | | 9/30/20 | | Change | | | LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | | Liabilities | | | | | | | | | | | | | | Future contract benefits | $ | 36,108 | $ | 36,420 | $ | 37,100 | $ | 38,604 | $ | 40,089 | 11.0% | | | Other contract holder funds | | 95,283 | | 98,018 | | 99,508 | | 100,537 | | 102,568 | 7.6% | | | Short-term debt | | 300 | | 300 | | - | | - | | - | -100.0% | | | Long-term debt by rating agency leverage definitions: | | | | | | | | | | | | | | Operating (see note (2) on page 6 for details) | | 866 | | 866 | | 866 | | 866 | | 866 | 0.0% | | | Financial | | 5,204 | | 5,201 | | 5,882 | | 5,870 | | 5,848 | 12.4% | | | Reinsurance related embedded derivatives | | 339 | | 327 | | - | | 245 | | 334 | -1.5% | | | Funds withheld reinsurance liabilities | | 1,817 | | 1,810 | | 1,843 | | 1,867 | | 1,910 | 5.1% | | | Payables for collateral on investments | | 5,528 | | 5,082 | | 8,434 | | 7,031 | | 6,435 | 16.4% | | | Other liabilities | | 14,742 | | 13,482 | | 17,824 | | 17,121 | | 15,230 | 3.3% | | | Separate account liabilities | | 145,092 | | 153,566 | | 130,617 | | 146,787 | | 152,975 | 5.4% | | | Total liabilities | | 305,279 | | 315,072 | | 302,074 | | 318,928 | | 326,255 | 6.9% | | | | | | | | | | | | | | | | | Stockholders’ Equity | | | | | | | | | | | | | | Common stock | | 5,192 | | 5,162 | | 5,071 | | 5,081 | | 5,093 | -1.9% | | | Retained earnings | | 8,559 | | 8,854 | | 8,500 | | 8,327 | | 8,647 | 1.0% | | | AOCI: | | | | | | | | | | | | | | Unrealized investment gains (losses) | | 6,572 | | 6,017 | | 3,348 | | 7,668 | | 8,153 | 24.1% | | | Foreign currency translation adjustment | | (29) | | (17) | | (27) | | (28) | | (21) | 27.6% | | | Funded status of employee benefit plans | | (295) | | (327) | | (317) | | (317) | | (323) | -9.5% | | | Total AOCI | | 6,248 | | 5,673 | | 3,004 | | 7,323 | | 7,809 | 25.0% | | | Total stockholders’ equity | | 19,999 | | 19,689 | | 16,575 | | 20,731 | | 21,549 | 7.8% | | | Total liabilities and stockholders’ equity | $ | 325,278 | $ | 334,761 | $ | 318,649 | $ | 339,659 | $ | 347,804 | 6.9% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Page 4b | | | | | | | | | | | |


Lincoln Financial Group
Earnings, Shares and Return on Equity
Unaudited (millions of dollars, except per share data)

	As of or For the Three Months Ended											As of or For the Nine Months Ended
	9/30/19		12/31/19		3/31/20		6/30/20		9/30/20		Change	9/30/19		9/30/20		Change
Income (Loss)
Net income (loss)	$	(161)	$	431	$	52	$	(94)	$	398	NM	$	454	$	356	-21.6%
Pre-tax adjusted income (loss) from operations		(104)		566		558		195		(212)	NM		969		541	-44.2%
After-tax adjusted income (loss) from operations (1)		(46)		482		465		187		(133)	NM		873		519	-40.5%
Adjusted operating tax rate		55.8%		14.8%		16.5%		4.0%		37.2%			9.9%		4.1%

Average Stockholders’ Equity
Average equity, including AOCI	$	19,227	$	19,844	$	18,132	$	18,653	$	21,140	9.9%	$	17,349	$	19,309	11.3%
Average AOCI		5,292		5,961		4,338		5,164		7,566	43.0%		3,372		5,689	68.7%
Average equity, excluding AOCI	$	13,935	$	13,883	$	13,794	$	13,489	$	13,574	-2.6%	$	13,977	$	13,620	-2.6%

ROE, Excluding AOCI
Net income (loss)		-4.6%		12.4%		1.5%		-2.8%		11.7%			4.3%		3.5%
Adjusted income (loss) from operations		-1.3%		13.9%		13.5%		5.5%		-3.9%			8.3%		5.1%

Per Share
Net income (loss) (diluted)	$	(0.83)	$	2.15	$	0.15	$	(0.49)	$	2.01	NM	$	2.24	$	1.74	-22.3%
Adjusted income (loss) from operations (diluted)		(0.25)		2.41		2.24		0.97		(0.72)	NM		4.30		2.57	-40.2%
Dividends declared during the period		0.37		0.40		0.40		0.40		0.40	8.1%		1.11		1.20	8.1%

Book value, including AOCI	$	100.84	$	100.11	$	85.79	$	107.28	$	111.51	10.6%	$	100.84	$	111.51	10.6%
Per share impact of AOCI		31.51		28.84		15.55		37.90		40.41	28.2%		31.51		40.41	28.2%
Book value, excluding AOCI	$	69.33	$	71.27	$	70.24	$	69.38	$	71.10	2.6%	$	69.33	$	71.10	2.6%

Shares
Repurchased during the period		2.5		1.7		3.8		-		-	-100.0%		8.7		3.8	-56.3%
End-of-period – basic		198.3		196.7		193.2		193.2		193.3	-2.5%		198.3		193.3	-2.5%
End-of-period – diluted		200.7		199.2		195.0		194.0		195.3	-2.7%		200.7		195.3	-2.7%
Average for the period – diluted		201.6		200.0		197.3		193.8		195.4	-3.1%		203.1		195.9	-3.5%

(1) See reconciliation to net income (loss) on page 24.




Page 5


Lincoln Financial Group
Key Stakeholder Metrics
Unaudited (millions of dollars, except per share data)

											For the Nine Months Ended
		12/31/19		3/31/20		6/30/20		9/30/20		Change	9/30/19		9/30/20		Change
Cash Returned to Common Stockholders
Shares repurchased	150	$	100	$	225	$	-	$	-	-100.0%	$	540	$	225	-58.3%
Common dividends	74		73		79		77		77	4.1%		225		233	3.6%
Total cash returned to common stockholders	224	$	173	$	304	$	77	$	77	-65.6%	$	765	$	458	-40.1%

Leverage Ratio
Short-term debt	300	$	300	$	-	$	-	$	-	-100.0%
Long-term debt	6,070		6,067		6,748		6,736		6,714	10.6%
Total debt (1)	6,370		6,367		6,748		6,736		6,714	5.4%
Less:
Operating debt (2)	866		866		866		866		866	0.0%
25% of capital securities	302		302		302		302		302	0.0%
Carrying value of fair value hedges and other items	331		278		459		451		428	29.3%
Total numerator	4,871	$	4,921	$	5,121	$	5,117	$	5,118	5.1%

Stockholders’ equity, excluding unrealized
investment gains (losses)	13,427	$	13,672	$	13,227	$	13,063	$	13,396	-0.2%
Add: 25% of capital securities	302		302		302		302		302	0.0%
Total numerator	4,871		4,921		5,121		5,117		5,118	5.1%
Total denominator	18,600	$	18,895	$	18,650	$	18,482	$	18,816	1.2%

Leverage ratio	26.2%		26.0%		27.5%		27.7%		27.2%

Holding Company Available Liquidity	765	$	702	$	760	$	774	$	756	-1.2%

(1) Excludes obligations under finance leases and certain financing arrangements of 456 million that are reported in other liabilities on our Consolidated Balance Sheets.
(2) We have categorized as operating debt the senior notes issued in October 2007 and June 2010 because the proceeds were used as a long-term structured solution to reduce the strain
on increasing statutory reserves associated with secondary guarantee UL and term policies.







Page 6

All values are in US Dollars.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Lincoln Financial Group | | | | | | | | | | | | | | | | | | | Segment and Sources of Earnings | | | | | | | | | | | | | | | | | | | Unaudited (millions of dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For the Three Months Ended | | | | | | | | | | | For the Nine Months Ended | | | | | | | | 9/30/19 | | 12/31/19 | | 3/31/20 | | 6/30/20 | | 9/30/20 | | Change | 9/30/19 | | 9/30/20 | | Change | | | Income (Loss) from Operations, Pre-Tax | | | | | | | | | | | | | | | | | | | Annuities | $ | 185 | $ | 312 | $ | 302 | $ | 272 | $ | 220 | 18.9% | $ | 781 | $ | 794 | 1.7% | | | Retirement Plan Services | | 49 | | 54 | | 45 | | 33 | | 58 | 18.4% | | 141 | | 135 | -4.3% | | | Life Insurance | | (318) | | 222 | | 209 | | (52) | | (400) | -25.8% | | 85 | | (244) | NM | | | Group Protection | | 78 | | 68 | | 50 | | 49 | | 8 | -89.7% | | 233 | | 108 | -53.6% | | | Other Operations | | (98) | | (90) | | (48) | | (107) | | (98) | 0.0% | | (271) | | (252) | 7.0% | | | Adjusted income (loss) from operations, before | | | | | | | | | | | | | | | | | | | income taxes | $ | (104) | $ | 566 | $ | 558 | $ | 195 | $ | (212) | NM | $ | 969 | $ | 541 | -44.2% | | | | | | | | | | | | | | | | | | | | | | Income (Loss) from Operations, After-Tax | | | | | | | | | | | | | | | | | | | Annuities | $ | 169 | $ | 269 | $ | 261 | $ | 237 | $ | 196 | 16.0% | $ | 686 | $ | 694 | 1.2% | | | Retirement Plan Services | | 44 | | 47 | | 40 | | 30 | | 50 | 13.6% | | 125 | | 119 | -4.8% | | | Life Insurance | | (245) | | 179 | | 171 | | (37) | | (311) | -26.9% | | 79 | | (177) | NM | | | Group Protection | | 61 | | 54 | | 40 | | 39 | | 6 | -90.2% | | 184 | | 85 | -53.8% | | | Other Operations | | (75) | | (67) | | (47) | | (82) | | (74) | 1.3% | | (201) | | (202) | -0.5% | | | Adjusted income (loss) from operations | $ | (46) | $ | 482 | $ | 465 | $ | 187 | $ | (133) | NM | $ | 873 | $ | 519 | -40.5% | | | | | | | | | | | | | | | | | | | | | | | For the Three Months Ended | | | | | | | | | | | For the Trailing Twelve Months | | | | | | | | 9/30/19 | | 12/31/19 | | 3/31/20 | | 6/30/20 | | 9/30/20 | | Change | 9/30/19 | | 9/30/20 | | Change | | | Sources of Earnings, Pre-Tax | | | | | | | | | | | | | | | | | | | Investment spread | $ | (126) | $ | 173 | $ | 151 | $ | 39 | $ | (119) | 5.6% | $ | 351 | $ | 244 | -30.5% | | | Mortality/morbidity | | (119) | | 189 | | 165 | | 15 | | (208) | -74.8% | | 438 | | 160 | -63.5% | | | Fees on AUM | | 262 | | 275 | | 290 | | 245 | | 321 | 22.5% | | 1,044 | | 1,132 | 8.4% | | | VA riders | | (23) | | 19 | | - | | 3 | | (108) | NM | | 40 | | (86) | NM | | | Total sources of earnings, before income taxes | | (6) | | 656 | | 606 | | 302 | | (114) | NM | | 1,873 | | 1,450 | -22.6% | | | Other Operations | | (98) | | (90) | | (48) | | (107) | | (98) | 0.0% | | (343) | | (343) | 0.0% | | | Adjusted income (loss) from operations, before | | | | | | | | | | | | | | | | | | | income taxes | $ | (104) | $ | 566 | $ | 558 | $ | 195 | $ | (212) | NM | $ | 1,532 | $ | 1,107 | -27.7% | | | | | | | | | | | | | | | | | | | | | | Sources of Earnings, Pre-Tax, Percentage By Component | | | | | | | | | | | | | | | | | | | Investment spread | | 1829.1% | | 26.4% | | 25.0% | | 12.7% | | 103.7% | | | 18.7% | | 16.8% | | | | Mortality/morbidity | | 1720.6% | | 28.8% | | 27.3% | | 4.8% | | 181.6% | | | 23.4% | | 11.1% | | | | Fees on AUM | | -3785.1% | | 42.0% | | 47.8% | | 81.3% | | -279.5% | | | 55.8% | | 78.0% | | | | VA riders | | 335.4% | | 2.8% | | -0.1% | | 1.2% | | 94.2% | | | 2.1% | | -5.9% | | | | Total | | 100.0% | | 100.0% | | 100.0% | | 100.0% | | 100.0% | | | 100.0% | | 100.0% | | | | | | | | | | | | | | | | | | | | | | | Page 7 | | | | | | | | | | | | | | | | |

Lincoln Financial Group
Select Earnings Drivers By Segment
Unaudited (millions of dollars)

	For the Three Months Ended											For the Nine Months Ended
	9/30/19		12/31/19		3/31/20		6/30/20		9/30/20		Change	9/30/19		9/30/20		Change
Annuities
Operating revenues	$	1,117	$	1,153	$	1,129	$	1,037	$	1,126	0.8%	$	3,447	$	3,292	-4.5%
Deposits		3,461		3,902		3,697		2,515		2,539	-26.6%		10,623		8,751	-17.6%
Net flows		253		729		528		58		(283)	NM		1,122		303	-73.0%
Average account values		133,922		137,817		137,922		134,197		144,368	7.8%		130,941		138,903	6.1%

Retirement Plan Services
Operating revenues	$	298	$	310	$	297	$	282	$	311	4.4%	$	890	$	889	-0.1%
Deposits		2,234		2,663		2,779		2,307		2,374	6.3%		6,803		7,459	9.6%
Net flows		272		422		671		(1,207)		362	33.1%		199		(175)	NM
Average account values		74,201		76,478		75,845		73,611		79,644	7.3%		72,166		76,797	6.4%

Life Insurance
Operating revenues	$	2,098	$	1,838	$	1,821	$	1,639	$	2,127	1.4%	$	5,600	$	5,587	-0.2%
Deposits		1,685		2,413		1,450		1,428		1,537	-8.8%		4,907		4,414	-10.0%
Net flows		1,227		1,957		963		1,023		1,156	-5.8%		3,464		3,142	-9.3%
Average account values		52,050		53,243		52,866		52,693		54,570	4.8%		51,300		53,376	4.0%
Average in-force face amount		790,667		814,865		836,488		853,071		870,505	10.1%		772,113		853,355	10.5%

Group Protection
Operating revenues	$	1,137	$	1,158	$	1,224	$	1,199	$	1,184	4.1%	$	3,430	$	3,608	5.2%
Insurance premiums		1,024		1,035		1,094		1,086		1,052	2.7%		3,079		3,231	4.9%

Consolidated
Adjusted operating revenues (1)	$	4,700	$	4,513	$	4,509	$	4,209	$	4,788	1.9%	$	13,533	$	13,507	-0.2%
Deposits		7,380		8,978		7,926		6,250		6,450	-12.6%		22,333		20,624	-7.7%
Net flows		1,752		3,108		2,162		(126)		1,235	-29.5%		4,785		3,270	-31.7%
Average account values		260,173		267,538		266,633		260,501		278,582	7.1%		254,407		269,076	5.8%

(1) See reconciliation to total revenues on page 24.





Page 8


Lincoln Financial Group
Sales By Segment
Unaudited (millions of dollars)

	For the Three Months Ended											For the Nine Months Ended
	9/30/19		12/31/19		3/31/20		6/30/20		9/30/20		Change	9/30/19		9/30/20		Change
Sales
Annuities:
With guaranteed living benefits	$	1,243	$	1,428	$	1,185	$	824	$	541	-56.5%	$	3,543	$	2,551	-28.0%
Without guaranteed living benefits		1,191		1,298		1,454		1,392		1,911	60.5%		3,171		4,756	50.0%
Variable		2,434		2,726		2,639		2,216		2,452	0.7%		6,714		7,307	8.8%
Fixed		1,027		1,176		1,058		299		87	-91.5%		3,909		1,444	-63.1%
Total Annuities	$	3,461	$	3,902	$	3,697	$	2,515	$	2,539	-26.6%	$	10,623	$	8,751	-17.6%

Retirement Plan Services:
First-year sales	$	723	$	1,227	$	867	$	827	$	870	20.3%	$	2,161	$	2,564	18.6%
Recurring deposits		1,511		1,436		1,912		1,480		1,504	-0.5%		4,642		4,895	5.5%
Total Retirement Plan Services	$	2,234	$	2,663	$	2,779	$	2,307	$	2,374	6.3%	$	6,803	$	7,459	9.6%

Life Insurance:
UL	$	11	$	20	$	9	$	5	$	3	-72.7%	$	37	$	17	-54.1%
MoneyGuard®		67		124		34		36		35	-47.8%		174		106	-39.1%
IUL		37		76		21		23		24	-35.1%		79		69	-12.7%
VUL		54		107		44		55		60	11.1%		159		157	-1.3%
Term		37		39		35		36		28	-24.3%		105		100	-4.8%
Total individual life insurance		206		366		143		155		150	-27.2%		554		449	-19.0%
Executive Benefits		28		81		26		4		36	28.6%		81		66	-18.5%
Total Life Insurance	$	234	$	447	$	169	$	159	$	186	-20.5%	$	635	$	515	-18.9%

Group Protection:
Life	$	131	$	108	$	50	$	47	$	24	-81.7%	$	237	$	121	-48.9%
Disability		96		140		42		47		17	-82.3%		179		106	-40.8%
Dental		15		49		10		11		8	-46.7%		40		29	-27.5%
Total Group Protection	$	242	$	297	$	102	$	105	$	49	-79.8%	$	456	$	256	-43.9%
Percent employee-paid		41.5%		37.6%		59.9%		51.6%		58.9%			45.3%		56.3%






Page 9


Lincoln Financial Group
Operating Revenues and General and Administrative Expenses By Segment
Unaudited (millions of dollars)

	For the Three Months Ended											For the Nine Months Ended
	9/30/19		12/31/19		3/31/20		6/30/20		9/30/20		Change	9/30/19		9/30/20		Change
Operating Revenues
Annuities	$	1,117	$	1,153	$	1,129	$	1,037	$	1,126	0.8%	$	3,447	$	3,292	-4.5%
Retirement Plan Services		298		310		297		282		311	4.4%		890		889	-0.1%
Life Insurance		2,098		1,838		1,821		1,639		2,127	1.4%		5,600		5,587	-0.2%
Group Protection		1,137		1,158		1,224		1,199		1,184	4.1%		3,430		3,608	5.2%
Other Operations		50		54		38		52		40	-20.0%		166		131	-21.1%
Total segment operating revenues	$	4,700	$	4,513	$	4,509	$	4,209	$	4,788	1.9%	$	13,533	$	13,507	-0.2%

General and Administrative Expenses,
Net of Amounts Capitalized (1)
Annuities		118	$	132	$	120	$	111	$	111	-5.9%	$	361	$	343	-5.0%
Retirement Plan Services		73		78		72		68		69	-5.5%		223		210	-5.8%
Life Insurance		123		145		121		116		118	-4.1%		376		355	-5.6%
Group Protection		162		174		154		153		155	-4.3%		486		461	-5.1%
Other Operations		25		43		(4)		55		34	36.0%		103		85	-17.5%
Total	$	501	$	572	$	463	$	503	$	487	-2.8%	$	1,549	$	1,454	-6.1%

General and Administrative Expenses,
Net of Amounts Capitalized, as a Percentage
of Operating Revenues
Annuities		10.6%		11.4%		10.7%		10.7%		9.9%			10.5%		10.4%
Retirement Plan Services		24.6%		25.3%		24.4%		24.3%		22.3%			25.1%		23.6%
Life Insurance		5.9%		7.9%		6.7%		7.1%		5.5%			6.7%		6.4%
Group Protection		14.1%		15.0%		12.5%		12.7%		13.1%			14.1%		12.8%
Other Operations		49.6%		81.8%		-10.0%		107.5%		83.7%			61.7%		65.3%
Total		10.7%		12.7%		10.3%		12.0%		10.2%			11.4%		10.8%

(1) See page 11 for general and administrative expenses capitalized.







Page 10

| | | | | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Lincoln Financial Group | | | | | | | | | | | | | | | | | | | Operating Commissions and Other Expenses | | | | | | | | | | | | | | | | | | | Unaudited (millions of dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For the Three Months Ended | | | | | | | | | | | For the Nine Months Ended | | | | | | | | 9/30/19 | | 12/31/19 | | 3/31/20 | | 6/30/20 | | 9/30/20 | | Change | 9/30/19 | | 9/30/20 | | Change | | | Operating Commissions and | | | | | | | | | | | | | | | | | | | Other Expenses Incurred | | | | | | | | | | | | | | | | | | | General and administrative expenses | $ | 569 | $ | 663 | $ | 520 | $ | 554 | $ | 537 | -5.6% | $ | 1,727 | $ | 1,610 | -6.8% | | | Commissions | | 707 | | 867 | | 706 | | 621 | | 611 | -13.6% | | 2,045 | | 1,937 | -5.3% | | | Taxes, licenses and fees | | 86 | | 87 | | 90 | | 79 | | 85 | -1.2% | | 260 | | 254 | -2.3% | | | Interest and debt expense | | 71 | | 72 | | 68 | | 68 | | 66 | -7.0% | | 212 | | 203 | -4.2% | | | Expenses associated with reserve financing | | | | | | | | | | | | | | | | | | | and unrelated letters of credit | | 22 | | 23 | | 23 | | 23 | | 24 | 9.1% | | 65 | | 69 | 6.2% | | | Total adjusted operating commissions and other | | | | | | | | | | | | | | | | | | | expenses incurred | | 1,455 | | 1,712 | | 1,407 | | 1,345 | | 1,323 | -9.1% | | 4,309 | | 4,073 | -5.5% | | | | | | | | | | | | | | | | | | | | | | Less Amounts Capitalized | | | | | | | | | | | | | | | | | | | General and administrative expenses | | (68) | | (91) | | (57) | | (51) | | (50) | 26.5% | | (178) | | (156) | 12.4% | | | Commissions | | (374) | | (523) | | (362) | | (291) | | (272) | 27.3% | | (1,046) | | (924) | 11.7% | | | Taxes, licenses and fees | | (14) | | (26) | | (13) | | (13) | | (11) | 21.4% | | (42) | | (37) | 11.9% | | | Total amounts capitalized | | (456) | | (640) | | (432) | | (355) | | (333) | 27.0% | | (1,266) | | (1,117) | 11.8% | | | Total expenses incurred, net of amounts | | | | | | | | | | | | | | | | | | | capitalized, excluding amortization | | 999 | | 1,072 | | 975 | | 990 | | 990 | -0.9% | | 3,043 | | 2,956 | -2.9% | | | | | | | | | | | | | | | | | | | | | | Amortization | | | | | | | | | | | | | | | | | | | Amortization of DAC, VOBA and other intangibles | | 601 | | 261 | | 247 | | 207 | | 680 | 13.1% | | 1,088 | | 1,134 | 4.2% | | | Total operating commissions and other expenses | $ | 1,600 | $ | 1,333 | $ | 1,222 | $ | 1,197 | $ | 1,670 | 4.4% | $ | 4,131 | $ | 4,090 | -1.0% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Page 11 | | | | | | | | | | | | | | | | |


Lincoln Financial Group
Interest Rate Yields and Spreads By Segment
Unaudited

	For the Three Months Ended											For the Nine Months Ended
	9/30/19		12/31/19		3/31/20		6/30/20		9/30/20		Change	9/30/19		9/30/20		Change
Annuities
Earned rate on reserves		4.04%		3.84%		3.73%		3.69%		3.63%	(41)		4.03%		3.69%	(34)
Variable investment income on reserves (1)		0.09%		0.20%		0.03%		0.10%		0.09%	-		0.08%		0.07%	(1)
Net investment income yield on reserves		4.13%		4.04%		3.76%		3.79%		3.72%	(41)		4.11%		3.76%	(35)
Interest rate credited to contract holders		2.46%		2.47%		2.31%		2.26%		2.12%	(34)		2.40%		2.22%	(18)
Interest rate spread		1.67%		1.57%		1.45%		1.53%		1.60%	(7)		1.71%		1.54%	(17)
Base spreads excluding variable investment income		1.58%		1.37%		1.42%		1.43%		1.51%	(7)		1.63%		1.47%	(16)

Retirement Plan Services
Earned rate on reserves		4.13%		4.07%		3.95%		3.85%		3.82%	(31)		4.15%		3.87%	(28)
Variable investment income on reserves (1)		0.16%		0.24%		0.05%		0.06%		0.10%	(6)		0.09%		0.07%	(2)
Net investment income yield on reserves		4.29%		4.31%		4.00%		3.91%		3.92%	(37)		4.24%		3.94%	(30)
Interest rate credited to contract holders		2.90%		2.89%		2.87%		2.86%		2.81%	(9)		2.91%		2.85%	(6)
Interest rate spread		1.39%		1.42%		1.13%		1.05%		1.11%	(28)		1.33%		1.09%	(24)
Base spreads excluding variable investment income		1.23%		1.18%		1.08%		0.99%		1.01%	(22)		1.24%		1.02%	(22)

Life Insurance – Interest-Sensitive
Earned rate on reserves		4.86%		4.84%		4.77%		4.78%		4.76%	(10)		4.86%		4.77%	(9)
Variable investment income on reserves (1)		-0.38%		0.33%		0.31%		-0.72%		0.76%	114		0.04%		0.12%	8
Net investment income yield on reserves		4.48%		5.17%		5.08%		4.06%		5.52%	104		4.90%		4.89%	(1)
Interest rate credited to contract holders		3.71%		3.71%		3.80%		3.81%		3.75%	4		3.69%		3.79%	10
Interest rate spread		0.77%		1.46%		1.28%		0.25%		1.77%	100		1.21%		1.10%	(11)
Base spreads excluding variable investment income		1.15%		1.13%		0.97%		0.97%		1.01%	(14)		1.17%		0.98%	(19)

Total (2)
Earned rate (3)		4.39%		4.33%		4.29%		4.06%		4.09%	(30)		4.36%		4.15%	(21)
Variable investment income (1) (3)		-0.19%		0.28%		0.19%		-0.34%		0.45%	64		0.06%		0.10%	4
Net investment income yield (3)		4.20%		4.61%		4.48%		3.72%		4.54%	34		4.42%		4.25%	(17)

(1) Variable investment income consists of commercial mortgage loan prepayment and bond make-whole premiums and investment income on alternative investments.
(2) Includes the results of all of our business segments and Other Operations.
(3) Includes investment yields on reserves and surplus.





Page 12


Lincoln Financial Group
Annuities – Select Earnings and Operational Data
Unaudited (millions of dollars)

	As of or For the Three Months Ended											As of or For the Nine Months Ended
	9/30/19		12/31/19		3/31/20		6/30/20		9/30/20		Change	9/30/19		9/30/20		Change
Income (Loss) from Operations
Operating revenues:
Insurance premiums	$	79	$	78	$	53	$	22	$	17	-78.5%	$	424	$	92	-78.3%
Fee income		596		606		593		567		608	2.0%		1,751		1,768	1.0%
Net investment income		287		309		326		270		334	16.4%		831		929	11.8%
Operating realized gain (loss)		51		53		54		49		57	11.8%		137		160	16.8%
Amortization of deferred gain		8		7		8		8		8	0.0%		23		24	4.3%
Other revenues		96		100		95		121		102	6.3%		281		319	13.5%
Total operating revenues		1,117		1,153		1,129		1,037		1,126	0.8%		3,447		3,292	-4.5%
Operating expenses:
Interest credited		183		190		192		192		198	8.2%		508		582	14.6%
Benefits		273		163		170		127		261	-4.4%		775		558	-28.0%
Commissions incurred		295		322		311		246		248	-15.9%		850		805	-5.3%
Other expenses incurred		240		257		250		221		232	-3.3%		717		703	-2.0%
Amounts capitalized		(175)		(198)		(191)		(122)		(118)	32.6%		(484)		(431)	11.0%
Amortization		116		107		95		101		85	-26.7%		300		281	-6.3%
Total operating expenses		932		841		827		765		906	-2.8%		2,666		2,498	-6.3%
Income (loss) from operations before taxes		185		312		302		272		220	18.9%		781		794	1.7%
Federal income tax expense (benefit)		16		43		41		35		24	50.0%		95		100	5.3%
Income (loss) from operations	$	169	$	269	$	261	$	237	$	196	16.0%	$	686	$	694	1.2%

Effective Federal Income Tax Rate		8.4%		13.9%		13.4%		12.9%		11.1%			12.2%		12.6%

Average Equity, Excluding Goodwill and AOCI	$	4,846	$	4,883	$	4,887	$	5,002	$	5,394	11.3%	$	4,791	$	5,094	6.3%

ROE, Excluding Goodwill and AOCI		14.0%		22.0%		21.4%		19.0%		14.5%			19.1%		18.2%

Return on Average Account Values		51		78		76		71		54	3		70		67	(3)

Income (Loss) from Operations
Variable annuity		198		233		232		207		176	-11.1%		645		615	-4.7%
Fixed annuity		(29)		36		29		30		20	169.0%		41		79	92.7%

Account Values
Variable annuity account values:
Average	$	118,680	$	121,632	$	120,972	$	116,861	$	127,011	7.0%	$	116,593	$	121,700	4.4%
End-of-period		118,424		125,492		108,689		121,712		127,585	7.7%		118,424		127,585	7.7%
Fixed annuity account values:
Average		15,242		16,185		16,950		17,336		17,357	13.9%		14,348		17,203	19.9%
End-of-period		15,611		16,636		17,208		17,349		17,263	10.6%		15,611		17,263	10.6%

Page 13


Lincoln Financial Group
Retirement Plan Services – Select Earnings and Operational Data
Unaudited (millions of dollars)

	As of or For the Three Months Ended											As of or For the Nine Months Ended
	9/30/19		12/31/19		3/31/20		6/30/20		9/30/20		Change	9/30/19		9/30/20		Change
Income (Loss) from Operations
Operating revenues:
Fee income	$	63	$	66	$	61	$	58	$	65	3.2%	$	187	$	184	-1.6%
Net investment income		229		239		229		218		240	4.8%		686		686	0.0%
Other revenues		6		5		7		6		6	0.0%		17		19	11.8%
Total operating revenues		298		310		297		282		311	4.4%		890		889	-0.1%
Operating expenses:
Interest credited		147		148		150		153		155	5.4%		437		458	4.8%
Benefits		1		1		-		1		1	0.0%		1		2	100.0%
Commissions incurred		20		20		19		18		19	-5.0%		60		56	-6.7%
Other expenses incurred		80		86		82		77		74	-7.5%		248		233	-6.0%
Amounts capitalized		(5)		(7)		(6)		(6)		(4)	20.0%		(15)		(16)	-6.7%
Amortization		6		8		7		6		8	33.3%		18		21	16.7%
Total operating expenses		249		256		252		249		253	1.6%		749		754	0.7%
Income (loss) from operations before taxes		49		54		45		33		58	18.4%		141		135	-4.3%
Federal income tax expense (benefit)		5		7		5		3		8	60.0%		16		16	0.0%
Income (loss) from operations	$	44	$	47	$	40	$	30	$	50	13.6%	$	125	$	119	-4.8%

Effective Federal Income Tax Rate		9.3%		13.7%		11.3%		10.1%		13.7%			10.8%		12.0%

Average Equity, Excluding Goodwill and AOCI	$	1,447	$	1,440	$	1,415	$	1,410	$	1,441	-0.4%	$	1,426	$	1,422	-0.3%

ROE, Excluding Goodwill and AOCI		12.2%		13.0%		11.2%		8.5%		13.8%			11.7%		11.2%

Pre-tax Net Margin		32.4%		33.6%		30.4%		25.8%		36.8%			31.1%		31.3%

Return on Average Account Values		24		25		21		16		25	1		23		21	(2)

Net Flows by Market
Small Market		117		118		141		30		113	-3.4%	$	330	$	284	-13.9%
Mid - Large Market		436		651		790		(1,084)		500	14.7%		685		206	-69.9%
Multi-Fund® and Other		(281)		(347)		(260)		(153)		(251)	10.7%		(816)		(665)	18.5%

Net Flows – Trailing Twelve Months	$	371	$	620	$	1,672	$	158	$	248	-33.2%	$	371	$	248	-33.2%





Page 14

| | | | | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Lincoln Financial Group | | | | | | | | | | | | | | | | | | | Life Insurance – Select Earnings and Operational Data | | | | | | | | | | | | | | | | | | | Unaudited (millions of dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of or For the Three Months Ended | | | | | | | | | | | As of or For the Nine Months Ended | | | | | | | | 9/30/19 | | 12/31/19 | | 3/31/20 | | 6/30/20 | | 9/30/20 | | Change | 9/30/19 | | 9/30/20 | | Change | | | Income (Loss) from Operations | | | | | | | | | | | | | | | | | | | Operating revenues: | | | | | | | | | | | | | | | | | | | Insurance premiums | $ | 219 | $ | 228 | $ | 224 | $ | 230 | $ | 223 | 1.8% | $ | 656 | $ | 676 | 3.0% | | | Fee income | | 1,275 | | 898 | | 893 | | 830 | | 1,141 | -10.5% | | 2,985 | | 2,865 | -4.0% | | | Net investment income | | 601 | | 706 | | 697 | | 577 | | 761 | 26.6% | | 1,952 | | 2,035 | 4.3% | | | Operating realized gain (loss) | | (1) | | (1) | | (3) | | (2) | | - | 100.0% | | (5) | | (5) | 0.0% | | | Amortization of deferred gain on | | | | | | | | | | | | | | | | | | | business sold through reinsurance | | - | | - | | 3 | | 3 | | 3 | NM | | - | | 9 | NM | | | Other revenues | | 4 | | 7 | | 7 | | 1 | | (1) | NM | | 12 | | 7 | -41.7% | | | Total operating revenues | | 2,098 | | 1,838 | | 1,821 | | 1,639 | | 2,127 | 1.4% | | 5,600 | | 5,587 | -0.2% | | | Operating expenses: | | | | | | | | | | | | | | | | | | | Interest credited | | 360 | | 364 | | 371 | | 375 | | 369 | 2.5% | | 1,069 | | 1,116 | 4.4% | | | Benefits | | 1,426 | | 942 | | 954 | | 1,084 | | 1,428 | 0.1% | | 3,240 | | 3,465 | 6.9% | | | Commissions incurred | | 212 | | 337 | | 191 | | 173 | | 171 | -19.3% | | 595 | | 535 | -10.1% | | | Other expenses incurred | | 215 | | 256 | | 209 | | 195 | | 209 | -2.8% | | 640 | | 614 | -4.1% | | | Amounts capitalized | | (246) | | (397) | | (216) | | (202) | | (202) | 17.9% | | (697) | | (620) | 11.0% | | | Amortization | | 449 | | 114 | | 103 | | 66 | | 552 | 22.9% | | 668 | | 721 | 7.9% | | | Total operating expenses | | 2,416 | | 1,616 | | 1,612 | | 1,691 | | 2,527 | 4.6% | | 5,515 | | 5,831 | 5.7% | | | Income (loss) from operations before taxes | | (318) | | 222 | | 209 | | (52) | | (400) | -25.8% | | 85 | | (244) | NM | | | Federal income tax expense (benefit) | | (73) | | 43 | | 38 | | (15) | | (89) | -21.9% | | 6 | | (67) | NM | | | Income (loss) from operations | $ | (245) | $ | 179 | $ | 171 | $ | (37) | $ | (311) | -26.9% | $ | 79 | $ | (177) | NM | | | | | | | | | | | | | | | | | | | | | | Effective Federal Income Tax Rate | | 22.9% | | 19.2% | | 18.1% | | 28.9% | | 22.2% | | | 6.0% | | 27.2% | | | | | | | | | | | | | | | | | | | | | | | Average Equity, Excluding Goodwill and AOCI | $ | 8,601 | $ | 8,502 | $ | 8,798 | $ | 8,977 | $ | 8,854 | 2.9% | $ | 8,566 | $ | 8,876 | 3.6% | | | | | | | | | | | | | | | | | | | | | | ROE, Excluding Goodwill and AOCI | | -11.4% | | 8.4% | | 7.8% | | -1.6% | | -14.1% | | | 1.2% | | -2.7% | | | | | | | | | | | | | | | | | | | | | | | Average Account Values | $ | 52,050 | $ | 53,243 | $ | 52,866 | $ | 52,693 | $ | 54,570 | 4.8% | $ | 51,300 | $ | 53,376 | 4.0% | | | | | | | | | | | | | | | | | | | | | | In-Force Face Amount | | | | | | | | | | | | | | | | | | | UL and other | $ | 348,836 | $ | 357,726 | $ | 356,889 | $ | 357,690 | $ | 358,897 | 2.9% | $ | 348,836 | $ | 358,897 | 2.9% | | | Term insurance | | 451,117 | | 472,050 | | 486,311 | | 505,251 | | 519,173 | 15.1% | | 451,117 | | 519,173 | 15.1% | | | Total in-force face amount | $ | 799,953 | $ | 829,776 | $ | 843,200 | $ | 862,941 | $ | 878,070 | 9.8% | $ | 799,953 | $ | 878,070 | 9.8% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Page 15 | | | | | | | | | | | | | | | | |


Lincoln Financial Group
Group Protection – Select Earnings and Operational Data
Unaudited (millions of dollars)

	As of or For the Three Months Ended											As of or For the Nine Months Ended
	9/30/19		12/31/19		3/31/20		6/30/20		9/30/20		Change	9/30/19		9/30/20		Change
Income (Loss) from Operations
Operating revenues:
Insurance premiums	$	1,024	$	1,035	$	1,094	$	1,086	$	1,052	2.7%	$	3,079	$	3,231	4.9%
Net investment income		72		81		81		69		88	22.2%		226		239	5.8%
Other revenues		41		42		49		44		44	7.3%		125		138	10.4%
Total operating revenues		1,137		1,158		1,224		1,199		1,184	4.1%		3,430		3,608	5.2%
Operating expenses:
Interest credited		2		1		2		1		1	-50.0%		4		4	0.0%
Benefits		756		768		862		843		875	15.7%		2,267		2,580	13.8%
Commissions incurred		88		95		87		97		80	-9.1%		272		264	-2.9%
Other expenses incurred		212		232		200		198		194	-8.5%		624		591	-5.3%
Amounts capitalized		(29)		(38)		(19)		(23)		(9)	69.0%		(72)		(50)	30.6%
Amortization		30		32		42		34		35	16.7%		102		111	8.8%
Total operating expenses		1,059		1,090		1,174		1,150		1,176	11.0%		3,197		3,500	9.5%
Income (loss) from operations before taxes		78		68		50		49		8	-89.7%		233		108	-53.6%
Federal income tax expense (benefit)		17		14		10		10		2	-88.2%		49		23	-53.1%
Income (loss) from operations	$	61	$	54	$	40	$	39	$	6	-90.2%	$	184	$	85	-53.8%

Effective Federal Income Tax Rate		21.0%		21.0%		21.0%		21.0%		21.0%			21.0%		21.0%

Average Equity, Excluding Goodwill and AOCI	$	2,492	$	2,554	$	2,601	$	2,628	$	2,678	7.5%	$	2,339	$	2,636	12.7%

ROE, Excluding Goodwill and AOCI		9.9%		8.4%		6.1%		5.9%		0.9%			10.5%		4.3%

Loss Ratios by Product Line
Life		70.5%		65.7%		79.4%		82.6%		91.9%			71.0%		84.5%
Disability		76.4%		80.5%		78.3%		78.7%		78.9%			75.6%		78.7%
Dental		73.4%		70.7%		74.6%		40.2%		70.1%			73.5%		61.7%
Total		74.1%		74.4%		78.5%		77.8%		83.2%			73.8%		79.8%








Page 16

| | | | | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Lincoln Financial Group | | | | | | | | | | | | | | | | | | | Other Operations – Select Earnings and Operational Data | | | | | | | | | | | | | | | | | | | Unaudited (millions of dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For the Three Months Ended | | | | | | | | | | | For the Nine Months Ended | | | | | | | | 9/30/19 | | 12/31/19 | | 3/31/20 | | 6/30/20 | | 9/30/20 | | Change | 9/30/19 | | 9/30/20 | | Change | | | Other Operations | | | | | | | | | | | | | | | | | | | Operating revenues: | | | | | | | | | | | | | | | | | | | Insurance premiums | $ | 3 | $ | 4 | $ | 2 | $ | 5 | $ | 2 | -33.3% | $ | 10 | $ | 9 | -10.0% | | | Net investment income | | 46 | | 46 | | 42 | | 38 | | 35 | -23.9% | | 147 | | 116 | -21.1% | | | Other revenues | | 1 | | 4 | | (6) | | 9 | | 3 | 200.0% | | 9 | | 6 | -33.3% | | | Total operating revenues | | 50 | | 54 | | 38 | | 52 | | 40 | -20.0% | | 166 | | 131 | -21.1% | | | Operating expenses: | | | | | | | | | | | | | | | | | | | Interest credited | | 14 | | 14 | | 12 | | 11 | | 9 | -35.7% | | 44 | | 31 | -29.5% | | | Benefits | | 42 | | 23 | | 16 | | 30 | | 33 | -21.4% | | 88 | | 80 | -9.1% | | | Commissions and other expenses | | 5 | | 17 | | (22) | | 36 | | 10 | 100.0% | | 46 | | 24 | -47.8% | | | Interest and debt expenses | | 71 | | 72 | | 68 | | 68 | | 66 | -7.0% | | 212 | | 203 | -4.2% | | | Strategic digitization expense | | 16 | | 18 | | 12 | | 14 | | 20 | 25.0% | | 47 | | 45 | -4.3% | | | Total operating expenses | | 148 | | 144 | | 86 | | 159 | | 138 | -6.8% | | 437 | | 383 | -12.4% | | | Income (loss) from operations before taxes | | (98) | | (90) | | (48) | | (107) | | (98) | 0.0% | | (271) | | (252) | 7.0% | | | Federal income tax expense (benefit) | | (23) | | (23) | | (1) | | (25) | | (24) | -4.3% | | (70) | | (50) | 28.6% | | | Income (loss) from operations | $ | (75) | $ | (67) | $ | (47) | $ | (82) | $ | (74) | 1.3% | $ | (201) | $ | (202) | -0.5% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Page 17 | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Lincoln Financial Group | | | | | | | | | | | | | | | | | | | Consolidated – DAC, VOBA, DSI and DFEL Roll Forwards | | | | | | | | | | | | | | | | | | | Unaudited (millions of dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For the Three Months Ended | | | | | | | | | | | For the Nine Months Ended | | | | | | | | 9/30/19 | | 12/31/19 | | 3/31/20 | | 6/30/20 | | 9/30/20 | | Change | 9/30/19 | | 9/30/20 | | Change | | | DAC, VOBA and DSI | | | | | | | | | | | | | | | | | | | Balance as of beginning-of-period | $ | 8,832 | $ | 7,731 | $ | 7,928 | $ | 9,457 | $ | 7,241 | -18.0% | $ | 10,512 | $ | 7,928 | -24.6% | | | Business acquired (sold) through reinsurance | | - | | - | | (10) | | - | | - | NM | | - | | (10) | NM | | | Cumulative effect from adoption of new | | | | | | | | | | | | | | | | | | | accounting standard | | - | | - | | 5 | | - | | - | NM | | - | | 5 | NM | | | Deferrals | | 459 | | 643 | | 435 | | 355 | | 334 | -27.2% | | 1,291 | | 1,123 | -13.0% | | | Operating amortization | | (604) | | (262) | | (243) | | (204) | | (679) | -12.4% | | (1,092) | | (1,126) | -3.1% | | | Deferrals, net of operating amortization | | (145) | | 381 | | 192 | | 151 | | (345) | NM | | 199 | | (3) | NM | | | Amortization associated with benefit ratio unlocking | | 3 | | (16) | | 66 | | (4) | | (10) | NM | | (29) | | 52 | 279.3% | | | Adjustment related to realized (gains) losses | | (9) | | 22 | | 58 | | 33 | | (198) | NM | | 33 | | (106) | NM | | | Adjustment related to unrealized (gains) losses | | (950) | | (190) | | 1,218 | | (2,396) | | (168) | 82.3% | | (2,984) | | (1,346) | 54.9% | | | Balance as of end-of-period | $ | 7,731 | $ | 7,928 | $ | 9,457 | $ | 7,241 | $ | 6,520 | -15.7% | $ | 7,731 | $ | 6,520 | -15.7% | | | | | | | | | | | | | | | | | | | | | | DFEL | | | | | | | | | | | | | | | | | | | Balance as of beginning-of-period | $ | 1,647 | $ | 482 | $ | 650 | $ | 1,379 | $ | 433 | -73.7% | $ | 2,769 | $ | 650 | -76.5% | | | Cumulative effect from adoption of new | | | | | | | | | | | | | | | | | | | accounting standards | | - | | - | | 4 | | - | | - | NM | | - | | 4 | NM | | | Deferrals | | 264 | | 368 | | 240 | | 252 | | 263 | -0.4% | | 732 | | 754 | 3.0% | | | Operating amortization | | (547) | | (163) | | (160) | | (111) | | (424) | 22.5% | | (803) | | (695) | 13.4% | | | Deferrals, net of operating amortization | | (283) | | 205 | | 80 | | 141 | | (161) | 43.1% | | (71) | | 59 | 183.1% | | | Amortization associated with benefit ratio unlocking | | - | | (2) | | 8 | | (2) | | (1) | NM | | (5) | | 5 | 200.0% | | | Adjustment related to realized (gains) losses | | (3) | | 3 | | 17 | | 12 | | (14) | NM | | (4) | | 16 | NM | | | Adjustment related to unrealized (gains) losses | | (879) | | (38) | | 620 | | (1,097) | | 135 | 115.4% | | (2,207) | | (342) | 84.5% | | | Balance as of end-of-period | $ | 482 | $ | 650 | $ | 1,379 | $ | 433 | $ | 392 | -18.7% | $ | 482 | $ | 392 | -18.7% | | | | | | | | | | | | | | | | | | | | | | DAC, VOBA, DSI and DFEL | | | | | | | | | | | | | | | | | | | Balance as of End-of-Period, After-Tax | $ | 5,727 | $ | 5,750 | $ | 6,382 | $ | 5,378 | $ | 4,841 | -15.5% | $ | 5,727 | $ | 4,841 | -15.5% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Page 18 | | | | | | | | | | | | | | | | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Lincoln Financial Group | | | | | | | | | | | | | | | | | | | Annuities – Account Value Roll Forwards | | | | | | | | | | | | | | | | | | | Unaudited (millions of dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For the Three Months Ended | | | | | | | | | | | For the Nine Months Ended | | | | | | | | 9/30/19 | | 12/31/19 | | 3/31/20 | | 6/30/20 | | 9/30/20 | | Change | 9/30/19 | | 9/30/20 | | Change | | | Fixed Annuities | | | | | | | | | | | | | | | | | | | Balance as of beginning-of-period | $ | 23,836 | $ | 24,448 | $ | 25,384 | $ | 25,740 | $ | 25,801 | 8.2% | $ | 21,666 | $ | 25,384 | 17.2% | | | Gross deposits | | 1,027 | | 1,176 | | 1,058 | | 299 | | 87 | -91.5% | | 3,909 | | 1,444 | -63.1% | | | Full surrenders and deaths | | (441) | | (355) | | (400) | | (384) | | (399) | 9.5% | | (1,411) | | (1,183) | 16.2% | | | Other contract benefits | | (145) | | (170) | | (156) | | (143) | | (135) | 6.9% | | (431) | | (434) | -0.7% | | | Net flows | | 441 | | 651 | | 502 | | (228) | | (447) | NM | | 2,067 | | (173) | NM | | | Contract holder assessments | | (10) | | (11) | | (13) | | (16) | | (16) | -60.0% | | (28) | | (44) | -57.1% | | | Reinvested interest credited | | 181 | | 296 | | (133) | | 305 | | 234 | 29.3% | | 743 | | 405 | -45.5% | | | Balance as of end-of-period, gross | | 24,448 | | 25,384 | | 25,740 | | 25,801 | | 25,572 | 4.6% | | 24,448 | | 25,572 | 4.6% | | | Reinsurance ceded | | (8,837) | | (8,748) | | (8,532) | | (8,452) | | (8,309) | 6.0% | | (8,837) | | (8,309) | 6.0% | | | Balance as of end-of-period, net | $ | 15,611 | $ | 16,636 | $ | 17,208 | $ | 17,349 | $ | 17,263 | 10.6% | $ | 15,611 | $ | 17,263 | 10.6% | | | | | | | | | | | | | | | | | | | | | | Variable Annuities | | | | | | | | | | | | | | | | | | | Balance as of beginning-of-period | $ | 119,005 | $ | 118,424 | $ | 125,492 | $ | 108,689 | $ | 121,713 | 2.3% | $ | 108,536 | $ | 125,492 | 15.6% | | | Gross deposits | | 2,434 | | 2,726 | | 2,639 | | 2,216 | | 2,452 | 0.7% | | 6,714 | | 7,307 | 8.8% | | | Full surrenders and deaths | | (1,711) | | (1,642) | | (1,602) | | (1,068) | | (1,384) | 19.1% | | (4,891) | | (4,054) | 17.1% | | | Other contract benefits | | (911) | | (1,006) | | (1,011) | | (862) | | (904) | 0.8% | | (2,768) | | (2,777) | -0.3% | | | Net flows | | (188) | | 78 | | 26 | | 286 | | 164 | 187.2% | | (945) | | 476 | 150.4% | | | Contract holder assessments | | (636) | | (638) | | (632) | | (611) | | (648) | -1.9% | | (1,857) | | (1,890) | -1.8% | | | Change in market value and reinvestment | | 243 | | 7,628 | | (16,197) | | 13,349 | | 6,356 | NM | | 12,690 | | 3,507 | -72.4% | | | Balance as of end-of-period, gross | | 118,424 | | 125,492 | | 108,689 | | 121,713 | | 127,585 | 7.7% | | 118,424 | | 127,585 | 7.7% | | | Reinsurance ceded | | - | | - | | - | | (1) | | - | NM | | - | | - | NM | | | Balance as of end-of-period, gross and net | $ | 118,424 | $ | 125,492 | $ | 108,689 | $ | 121,712 | $ | 127,585 | 7.7% | $ | 118,424 | $ | 127,585 | 7.7% | | | | | | | | | | | | | | | | | | | | | | Total | | | | | | | | | | | | | | | | | | | Balance as of beginning-of-period | $ | 142,841 | $ | 142,872 | $ | 150,876 | $ | 134,429 | $ | 147,514 | 3.3% | $ | 130,202 | $ | 150,876 | 15.9% | | | Gross deposits | | 3,461 | | 3,902 | | 3,697 | | 2,515 | | 2,539 | -26.6% | | 10,623 | | 8,751 | -17.6% | | | Full surrenders and deaths | | (2,152) | | (1,997) | | (2,002) | | (1,452) | | (1,783) | 17.1% | | (6,302) | | (5,237) | 16.9% | | | Other contract benefits | | (1,056) | | (1,176) | | (1,167) | | (1,005) | | (1,039) | 1.6% | | (3,199) | | (3,211) | -0.4% | | | Net flows | | 253 | | 729 | | 528 | | 58 | | (283) | NM | | 1,122 | | 303 | -73.0% | | | Contract holder assessments | | (646) | | (649) | | (645) | | (627) | | (664) | -2.8% | | (1,885) | | (1,934) | -2.6% | | | Change in market value and reinvestment | | 424 | | 7,924 | | (16,330) | | 13,654 | | 6,590 | NM | | 13,433 | | 3,912 | -70.9% | | | Balance as of end-of-period, gross | | 142,872 | | 150,876 | | 134,429 | | 147,514 | | 153,157 | 7.2% | | 142,872 | | 153,157 | 7.2% | | | Reinsurance ceded | | (8,837) | | (8,748) | | (8,532) | | (8,453) | | (8,309) | 6.0% | | (8,837) | | (8,309) | 6.0% | | | Balance as of end-of-period, net | $ | 134,035 | $ | 142,128 | $ | 125,897 | $ | 139,061 | $ | 144,848 | 8.1% | $ | 134,035 | $ | 144,848 | 8.1% | | | | | | | | | | | | | | | | | | | | | | Page 19 | | | | | | | | | | | | | | | | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Lincoln Financial Group | | | | | | | | | | | | | | | | | | | Retirement Plan Services – Account Value Roll Forwards | | | | | | | | | | | | | | | | | | | Unaudited (millions of dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For the Three Months Ended | | | | | | | | | | | For the Nine Months Ended | | | | | | | | 9/30/19 | | 12/31/19 | | 3/31/20 | | 6/30/20 | | 9/30/20 | | Change | 9/30/19 | | 9/30/20 | | Change | | | General Account | | | | | | | | | | | | | | | | | | | Balance as of beginning-of-period | $ | 20,076 | $ | 20,337 | $ | 20,558 | $ | 21,335 | $ | 21,672 | 7.9% | $ | 19,766 | $ | 20,558 | 4.0% | | | Gross deposits | | 469 | | 663 | | 609 | | 817 | | 568 | 21.1% | | 1,319 | | 1,994 | 51.2% | | | Withdrawals | | (490) | | (682) | | (565) | | (752) | | (477) | 2.7% | | (1,479) | | (1,793) | -21.2% | | | Net flows | | (21) | | (19) | | 44 | | 65 | | 91 | NM | | (160) | | 201 | 225.6% | | | Transfers between fixed and variable accounts | | 136 | | 94 | | 587 | | 124 | | 402 | 195.6% | | 303 | | 1,112 | 267.0% | | | Contract holder assessments | | (3) | | (3) | | (3) | | (3) | | (4) | -33.3% | | (8) | | (10) | -25.0% | | | Reinvestment interest credited | | 149 | | 149 | | 149 | | 151 | | 155 | 4.0% | | 436 | | 455 | 4.4% | | | Balance as of end-of-period | $ | 20,337 | $ | 20,558 | $ | 21,335 | $ | 21,672 | $ | 22,316 | 9.7% | $ | 20,337 | $ | 22,316 | 9.7% | | | | | | | | | | | | | | | | | | | | | | Separate Account and Mutual Funds | | | | | | | | | | | | | | | | | | | Balance as of beginning-of-period | $ | 53,938 | $ | 54,227 | $ | 58,131 | $ | 48,301 | $ | 54,886 | 1.8% | $ | 47,289 | $ | 58,131 | 22.9% | | | Gross deposits | | 1,765 | | 2,000 | | 2,170 | | 1,490 | | 1,806 | 2.3% | | 5,484 | | 5,465 | -0.3% | | | Withdrawals | | (1,472) | | (1,559) | | (1,543) | | (2,762) | | (1,535) | -4.3% | | (5,125) | | (5,841) | -14.0% | | | Net flows | | 293 | | 441 | | 627 | | (1,272) | | 271 | -7.5% | | 359 | | (376) | NM | | | Transfers between fixed and variable accounts | | (190) | | (171) | | (610) | | (161) | | (436) | NM | | (542) | | (1,205) | NM | | | Contract holder assessments | | (54) | | (55) | | (54) | | (49) | | (50) | 7.4% | | (158) | | (153) | 3.2% | | | Change in market value and reinvestment | | 240 | | 3,689 | | (9,793) | | 8,067 | | 3,584 | NM | | 7,279 | | 1,858 | -74.5% | | | Balance as of end-of-period | $ | 54,227 | $ | 58,131 | $ | 48,301 | $ | 54,886 | $ | 58,255 | 7.4% | $ | 54,227 | $ | 58,255 | 7.4% | | | | | | | | | | | | | | | | | | | | | | Total | | | | | | | | | | | | | | | | | | | Balance as of beginning-of-period | $ | 74,014 | $ | 74,564 | $ | 78,689 | $ | 69,636 | $ | 76,558 | 3.4% | $ | 67,055 | $ | 78,689 | 17.3% | | | Gross deposits | | 2,234 | | 2,663 | | 2,779 | | 2,307 | | 2,374 | 6.3% | | 6,803 | | 7,459 | 9.6% | | | Withdrawals | | (1,962) | | (2,241) | | (2,108) | | (3,514) | | (2,012) | -2.5% | | (6,604) | | (7,634) | -15.6% | | | Net flows | | 272 | | 422 | | 671 | | (1,207) | | 362 | 33.1% | | 199 | | (175) | NM | | | Transfers between fixed and variable accounts | | (54) | | (77) | | (23) | | (37) | | (34) | 37.0% | | (239) | | (93) | 61.1% | | | Contract holder assessments | | (57) | | (58) | | (57) | | (52) | | (54) | 5.3% | | (166) | | (163) | 1.8% | | | Change in market value and reinvestment | | 389 | | 3,838 | | (9,644) | | 8,218 | | 3,739 | NM | | 7,715 | | 2,313 | -70.0% | | | Balance as of end-of-period | $ | 74,564 | $ | 78,689 | $ | 69,636 | $ | 76,558 | $ | 80,571 | 8.1% | $ | 74,564 | $ | 80,571 | 8.1% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Page 20 | | | | | | | | | | | | | | | | |


Lincoln Financial Group
Life Insurance – Account Value Roll Forwards
Unaudited (millions of dollars)

	For the Three Months Ended											For the Nine Months Ended
	9/30/19		12/31/19		3/31/20		6/30/20		9/30/20		Change	9/30/19		9/30/20		Change
General Account
Balance as of beginning-of-period	$	37,438	$	37,582	$	38,141	$	38,054	$	38,034	1.6%	$	37,289	$	38,141	2.3%
Deposits		1,137		1,525		996		964		966	-15.0%		3,281		2,926	-10.8%
Withdrawals and deaths		(243)		(156)		(380)		(263)		(230)	5.3%		(770)		(873)	-13.4%
Net flows		894		1,369		616		701		736	-17.7%		2,511		2,053	-18.2%
Contract holder assessments		(1,094)		(1,184)		(1,075)		(1,073)		(1,079)	1.4%		(3,242)		(3,227)	0.5%
Reinvested interest credited		344		374		372		352		389	13.1%		1,024		1,113	8.7%
Balance as of end-of-period, gross		37,582		38,141		38,054		38,034		38,080	1.3%		37,582		38,080	1.3%
Reinsurance ceded		(660)		(656)		(649)		(646)		(646)	2.1%		(660)		(646)	2.1%
Balance as of end-of-period, net	$	36,922	$	37,485	$	37,405	$	37,388	$	37,434	1.4%	$	36,922	$	37,434	1.4%

Separate Account
Balance as of beginning-of-period	$	15,941	$	16,136	$	17,646	$	14,782	$	17,351	8.8%	$	13,735	$	17,646	28.5%
Deposits		548		888		454		464		571	4.2%		1,626		1,488	-8.5%
Withdrawals and deaths		(215)		(300)		(107)		(142)		(151)	29.8%		(673)		(399)	40.7%
Net flows		333		588		347		322		420	26.1%		953		1,089	14.3%
Contract holder assessments		(197)		(230)		(204)		(211)		(217)	-10.2%		(585)		(632)	-8.0%
Change in market value and reinvestment		59		1,152		(3,007)		2,458		1,117	NM		2,033		568	-72.1%
Balance as of end-of-period, gross		16,136		17,646		14,782		17,351		18,671	15.7%		16,136		18,671	15.7%
Reinsurance ceded		(829)		(876)		(712)		(830)		(874)	-5.4%		(829)		(874)	-5.4%
Balance as of end-of-period, net	$	15,307	$	16,770	$	14,070	$	16,521	$	17,797	16.3%	$	15,307	$	17,797	16.3%

Total
Balance as of beginning-of-period	$	53,379	$	53,718	$	55,787	$	52,836	$	55,385	3.8%	$	51,024	$	55,787	9.3%
Deposits		1,685		2,413		1,450		1,428		1,537	-8.8%		4,907		4,414	-10.0%
Withdrawals and deaths		(458)		(456)		(487)		(405)		(381)	16.8%		(1,443)		(1,272)	11.9%
Net flows		1,227		1,957		963		1,023		1,156	-5.8%		3,464		3,142	-9.3%
Contract holder assessments		(1,291)		(1,414)		(1,279)		(1,284)		(1,296)	-0.4%		(3,827)		(3,859)	-0.8%
Change in market value and reinvestment		403		1,526		(2,635)		2,810		1,506	273.7%		3,057		1,681	-45.0%
Balance as of end-of-period, gross		53,718		55,787		52,836		55,385		56,751	5.6%		53,718		56,751	5.6%
Reinsurance ceded		(1,489)		(1,532)		(1,361)		(1,476)		(1,520)	-2.1%		(1,489)		(1,520)	-2.1%
Balance as of end-of-period, net	$	52,229	$	54,255	$	51,475	$	53,909	$	55,231	5.7%	$	52,229	$	55,231	5.7%




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| | | | | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Lincoln Financial Group | | | | | | | | | | | | | | | Select Investment Data | | | | | | | | | | | | | | | Unaudited (millions of dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of 9/30/19 | | | | As of 12/31/19 | | | | As of 9/30/20 | | | | | | | Amount | | % | | Amount | | % | | Amount | | % | | | | Fixed Maturity AFS, Trading and Equity Securities, at Fair Value | | | | | | | | | | | | | | | Fixed maturity AFS securities, net of allowance for credit losses: | | | | | | | | | | | | | | | Corporate bonds | $ | 87,910 | | 81.2% | $ | 88,716 | | 80.7% | $ | 98,717 | | 80.1% | | | U.S. government bonds | | 438 | | 0.4% | | 435 | | 0.4% | | 496 | | 0.4% | | | State and municipal bonds | | 5,800 | | 5.3% | | 5,884 | | 5.4% | | 6,774 | | 5.5% | | | Foreign government bonds | | 444 | | 0.4% | | 393 | | 0.4% | | 436 | | 0.4% | | | Residential mortgage-backed securities | | 3,287 | | 3.0% | | 3,241 | | 2.9% | | 3,203 | | 2.6% | | | Commercial mortgage-backed securities | | 1,033 | | 1.0% | | 1,083 | | 1.0% | | 1,430 | | 1.2% | | | Asset-backed securities | | 4,172 | | 3.8% | | 4,889 | | 4.4% | | 6,590 | | 5.4% | | | Hybrid and redeemable preferred securities | | 575 | | 0.5% | | 559 | | 0.5% | | 606 | | 0.5% | | | Total fixed maturity AFS securities, net of allowance for credit losses | | 103,659 | | 95.6% | | 105,200 | | 95.7% | | 118,252 | | 96.1% | | | Trading securities | | 4,691 | | 4.3% | | 4,673 | | 4.2% | | 4,633 | | 3.8% | | | Equity securities | | 158 | | 0.1% | | 103 | | 0.1% | | 122 | | 0.1% | | | Total fixed maturity AFS securities, net of allowance for credit losses, and trading and | | | | | | | | | | | | | | | equity securities | $ | 108,508 | | 100.0% | $ | 109,976 | | 100.0% | $ | 123,007 | | 100.0% | | | | | | | | | | | | | | | | | | Fixed Maturity AFS, Trading and Equity Securities, at Amortized Cost | | | | | | | | | | | | | | | Fixed maturity AFS securities | $ | 88,176 | | 95.4% | $ | 94,295 | | 95.8% | $ | 101,885 | | 95.8% | | | Trading securities | | 4,093 | | 4.4% | | 4,005 | | 4.1% | | 4,296 | | 4.1% | | | Equity securities | | 185 | | 0.2% | | 123 | | 0.1% | | 140 | | 0.1% | | | Total fixed maturity AFS, trading and equity securities | $ | 92,454 | | 100.0% | $ | 98,423 | | 100.0% | $ | 106,321 | | 100.0% | | | | | | | | | | | | | | | | | | Percentage of Fixed Maturity AFS Securities, at Amortized Cost | | | | | | | | | | | | | | | Investment grade | | | | 96.4% | | | | 96.3% | | | | 95.9% | | | Below investment grade | | | | 3.6% | | | | 3.7% | | | | 4.1% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Page 22 | | | | | | | | | | | | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Lincoln Financial Group | | | | | | | | | | | | | | | | | | | Realized Gain (Loss) and Benefit Ratio Unlocking, After-DAC | | | | | | | | | | | | | | | | | | | Unaudited (millions of dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For the Three Months Ended | | | | | | | | | | | For the Nine Months Ended | | | | | | | | 9/30/19 | | 12/31/19 | | 3/31/20 | | 6/30/20 | | 9/30/20 | | Change | 9/30/19 | | 9/30/20 | | Change | | | Components of Realized Gain (Loss), Pre-Tax | | | | | | | | | | | | | | | | | | | Total adjusted operating realized gain (loss) | $ | 50 | $ | 52 | $ | 51 | $ | 47 | $ | 57 | 14.0% | $ | 132 | $ | 155 | 17.4% | | | Total excluded realized gain (loss) | | (61) | | (171) | | (75) | | (694) | | 572 | NM | | (623) | | (198) | 68.2% | | | Total realized gain (loss), pre-tax | $ | (11) | $ | (119) | $ | (24) | $ | (647) | $ | 629 | NM | $ | (491) | $ | (43) | 91.2% | | | | | | | | | | | | | | | | | | | | | | Reconciliation of Excluded Realized Gain (Loss) | | | | | | | | | | | | | | | | | | | Net of Benefit Ratio Unlocking, After-Tax | | | | | | | | | | | | | | | | | | | Total excluded realized gain (loss) | $ | (49) | $ | (135) | $ | (60) | $ | (548) | $ | 452 | NM | $ | (492) | $ | (156) | 68.3% | | | Benefit ratio unlocking | | (2) | | 91 | | (349) | | 282 | | 83 | NM | | 186 | | 17 | -90.9% | | | Excluded realized gain (loss) net of | | | | | | | | | | | | | | | | | | | benefit ratio unlocking, after-tax | $ | (51) | $ | (44) | $ | (409) | $ | (266) | $ | 535 | NM | $ | (306) | $ | (139) | 54.6% | | | | | | | | | | | | | | | | | | | | | | Components of Excluded Realized Gain (Loss) Net | | | | | | | | | | | | | | | | | | | of Benefit Ratio Unlocking, After-Tax | | | | | | | | | | | | | | | | | | | Credit loss benefit (expense) on mortgage loans on | | | | | | | | | | | | | | | | | | | real estate | $ | - | $ | - | $ | (51) | $ | (79) | $ | 50 | NM | $ | - | $ | (79) | NM | | | Credit loss benefit (expense) on other financial assets | | - | | - | | (16) | | (1) | | (1) | NM | | - | | (17) | NM | | | OTTI | | (2) | | (1) | | - | | - | | - | 100.0% | | (11) | | - | 100.0% | | | Realized gain (loss) related to certain financial assets | | (12) | | (8) | | 14 | | (36) | | (5) | 59.7% | | (33) | | (28) | 15.2% | | | Realized gain (loss) on equity securities | | (14) | | 3 | | (15) | | 2 | | 3 | 121.4% | | (8) | | (10) | -25.0% | | | Realized gain (loss) on the mark-to-market on certain | | | | | | | | | | | | | | | | | | | instruments | | 19 | | 9 | | 38 | | (1) | | (6) | NM | | (103) | | 32 | 131.1% | | | Realized gain (loss) related to financial assets, after-tax | | (9) | | 3 | | (30) | | (115) | | 41 | NM | | (155) | | (102) | 34.2% | | | Variable annuity net derivative results: | | | | | | | | | | | | | | | | | | | Hedge program performance, including unlocking | | | | | | | | | | | | | | | | | | | for GLB reserves hedged | | (65) | | 2 | | (496) | | (71) | | 12 | 118.5% | | (99) | | (555) | NM | | | GLB non-performance risk component | | 43 | | (55) | | 147 | | (79) | | 464 | NM | | 14 | | 532 | NM | | | Total variable annuity net derivative results | | (22) | | (53) | | (349) | | (150) | | 476 | NM | | (85) | | (23) | 72.9% | | | Indexed annuity forward-starting option | | (20) | | 6 | | (30) | | (1) | | 18 | 190.0% | | (66) | | (14) | 78.8% | | | Excluded realized gain (loss) net of | | | | | | | | | | | | | | | | | | | benefit ratio unlocking, after-tax | $ | (51) | $ | (44) | $ | (409) | $ | (266) | $ | 535 | NM | $ | (306) | $ | (139) | 54.6% | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Page 23 | | | | | | | | | | | | | | | | |

Lincoln Financial Group
Select GAAP to Non-GAAP Reconciliations
Unaudited (millions of dollars)

	For the Three Months Ended											For the Nine Months Ended
	9/30/19		12/31/19		3/31/20		6/30/20		9/30/20		Change	9/30/19		9/30/20		Change
Revenues
Total revenues	$	4,638	$	4,344	$	4,425	$	3,517	$	5,361	15.6%	$	12,913	$	13,303	3.0%
Less:
Excluded realized gain (loss)		(61)		(171)		(75)		(694)		572	NM		(623)		(198)	68.2%
Amortization of DFEL associated with
benefit ratio unlocking		(1)		2		(9)		2		1	200.0%		3		(6)	NM
Adjusted operating revenues	$	4,700	$	4,513	$	4,509	$	4,209	$	4,788	1.9%	$	13,533	$	13,507	-0.2%

Net Income
Net income (loss)	$	(161)	$	431	$	52	$	(94)	$	398	NM	$	454	$	356	-21.6%
Less:
Excluded realized gain (loss), after-tax		(49)		(135)		(60)		(548)		452	NM		(492)		(156)	68.3%
Benefit ratio unlocking, after-tax		(2)		91		(349)		282		83	NM		186		17	-90.9%
Net impact from the Tax Cuts and Jobs Act		-		17		-		-		-	NM		-		-	NM
Acquisition and integration costs related to
mergers and acquisitions, after-tax		(31)		(24)		(4)		(3)		(4)	87.1%		(80)		(12)	85.0%
Gain (loss) on early extinguishment of debt, after-tax		(33)		-		-		(12)		-	100.0%		(33)		(12)	63.6%
Total adjustments		(115)		(51)		(413)		(281)		531	NM		(419)		(163)	61.1%
Adjusted income (loss) from operations	$	(46)	$	482	$	465	$	187	$	(133)	NM	$	873	$	519	-40.5%

Earnings (Loss) Per Common Share – Diluted
Net income (loss)	$	(0.83)	$	2.15	$	0.15	$	(0.49)	$	2.01	NM	$	2.24	$	1.74	-22.3%
Less:
Excluded realized gain (loss), after-tax		(0.24)		(0.68)		(0.30)		(2.85)		2.32	NM		(2.42)		(0.80)	66.9%
Benefit ratio unlocking, after-tax		(0.01)		0.46		(1.77)		1.46		0.43	NM		0.91		0.09	-90.1%
Net impact from the Tax Cuts and Jobs Act		-		0.08		-		-		-	NM		-		-	NM
Acquisition and integration costs related to mergers
and acquisitions, after-tax		(0.16)		(0.12)		(0.02)		(0.01)		(0.02)	87.5%		(0.39)		(0.06)	84.6%
Gain (loss) on early extinguishment of debt, after-tax		(0.17)		-		-		(0.06)		-	100.0%		(0.16)		(0.06)	62.5%
Adjusted income (loss) from operations	$	(0.25)	$	2.41	$	2.24	$	0.97	$	(0.72)	NM	$	4.30	$	2.57	-40.2%





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