UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

February 8, 2024
Date of Report (Date of earliest event reported)

                  Lincoln National Corporation             
(Exact name of registrant as specified in its charter)



Indiana1-602835-1140070
(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 classTrading symbol(s)Name of each exchange on which registered
Common StockLNCNew York Stock Exchange
Depositary Shares, each representing a 1/1000th interest in a share of 9.000% Non-Cumulative Preferred Stock, Series D
LNC PRDNew 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.   







Item 2.02. Results of Operations and Financial Condition.

On February 8, 2024, Lincoln National Corporation (the “Company”) issued a press release announcing its financial results for the quarter and full year ended December 31, 2023, 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 December 31, 2023, 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 (the “Exchange Act”), 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 (the “Securities Act”), except as otherwise expressly stated in such filing.

Item 7.01. Regulation FD Disclosure.

On February 8, 2024, in connection with the Company’s fourth quarter 2023 earnings conference call scheduled for the same date, the Company made available on its website a fourth quarter 2023 investor outlook presentation dated February 8, 2024, a copy of which is attached hereto as Exhibit 99.3 and is incorporated herein by reference.

This presentation is being furnished under this Item 7.01 and shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section. The information in Exhibit 99.3 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act, 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.






















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/ Adam Cohen
Name:Adam Cohen
Title:Senior Vice President and Chief Accounting Officer

    

Date: February 8, 2024



image_0.jpg

FOR IMMEDIATE RELEASE

Lincoln Financial Group Reports 2023 Fourth Quarter and Full Year Results
____________________________________
Radnor, PA, February 8, 2024: Lincoln Financial Group (NYSE: LNC) today reported financial results for the fourth quarter and full year ended December 31, 2023.
Net loss available to common stockholders was $(1.2) billion, or $(7.35) per diluted share.
Adjusted operating income available to common stockholders was $246 million, or $1.45 per diluted share.
The primary differences between net income and adjusted operating income resulted from the following non-economic factors:
$(0.8) billion of the net loss, or $(4.71) per diluted share, primarily due to changes in market risk benefits driven by lower interest rates, which more than offset the benefit of higher equity markets.
$(0.6) billion of the net loss, or $(3.67) per diluted share, was driven by a change in the fair value of an embedded derivative related to the Fortitude Re reinsurance transaction, with a direct offset in other comprehensive income.
Expected year-end risk-based-capital (RBC) ratio was in the range of 400-410%, an estimated increase of more than 20 percentage points from the 375-385% range at the end of the 2023 third quarter.

“The 2023 fourth quarter marked a significant step forward in rebuilding capital, and we expect our year-end risk-based capital ratio to be above our target of 400%,” said Ellen Cooper, Chairman, President and CEO of Lincoln Financial Group. “We delivered improved operating performance led by our Group Protection business, record sales in Annuities, and more stable Life earnings. In Retirement Plan Services, we achieved our ninth consecutive year of positive flows. We are making meaningful progress in resetting our businesses for profitable organic growth as we reposition our product sales to a more capital-efficient and higher risk-adjusted return mix supported by our leading distribution.

“Additionally, we closed a major reinsurance transaction with Fortitude Re and announced the agreement to sell our wealth management business to Osaic, Inc. As we look ahead, we will build on our solid foundation and strong momentum to further strengthen our balance sheet, improve free cash flow, and grow profitably as we position our company to deliver increasing shareholder value.”




Business Highlights
image.jpg
Our 2023 fourth-quarter and full-year results were driven by substantial progress in each of our businesses and reflect our focused execution as we advance on our multi-year journey to transform our business.

Group Protection delivered record full-year earnings and strong top-line growth. Group’s margin grew over 400 basis points year over year to 5.5%, excluding the benefit from the annual assumption review. This result was attributable to disciplined pricing and improved risk results.
Annuities delivered a record sales quarter, driven by strength in fixed annuities which surpassed the $2 billion mark in the quarter for the first time. This strong growth was driven by our strategic positioning across fixed product categories and with select distribution partners.
Life Insurance sales declined for the fourth quarter and full year, driven by our intentional strategic realignment to more accumulation products, which are expected to deliver more stable cash flows and higher risk-adjusted margins.
Retirement Plan Services 2023 fourth-quarter and full-year results were below expectations, and we are taking actions to regain momentum and drive long-term sustainable growth. Retirement achieved its ninth consecutive year of positive flows, surpassing $100 billion in assets under management for the first time.
Our reinsurance transaction with Fortitude Re closed during the quarter, de-risking and strengthening our balance sheet while driving increased free cash flow.
We announced the sale of our wealth management business to Osaic, Inc., which is expected to close in the first half of 2024 and to provide at least $700 million of capital benefit.
We continued to invest in our technology and infrastructure to support future growth, including digital platforms to enhance the customer experience and innovative tools to drive more production for our distribution force.











Earnings Summary
image.jpg
For the Three Months Ended December 31
For the Twelve Months Ended December 31
(in millions, except per share data)
12/31/2022(2)
12/31/2023
12/31/2022(2)
12/31/2023
Net Income (Loss)
$812
$(1,235)
$1,358
$(752)
Net Income (Loss) Available to Common Stockholders
807
(1,246)
1,345
(835)
Net Income (Loss) per Diluted Share Available to Common Stockholders(1)
4.73
(7.35)
7.78
(4.92)
Adjusted Income (Loss) from Operations
134
258
(1,167)
973
Adjusted Income (Loss) from Operations Available to Common Stockholders
129
246
(1,180)
890
Adjusted Income (Loss) from Operations per Diluted Share Available to Common Stockholders(1)
$0.76
$1.45
$(6.90)
$5.22
(1) In periods where a net loss or adjusted loss from operations is presented, basic shares are used in the diluted EPS and adjusted diluted EPS calculations, as the use of diluted shares would result in a lower loss per share.
(2) Prior-year numbers have been adjusted to reflect LDTI accounting.

Condensed Reconciliation of Net Income to Adjusted Income from Operations(1)image.jpg
For the Three Months Ended
For the Twelve Months Ended
(in millions)
12/31/2022(2)
12/31/2023
12/31/2022(2)
12/31/2023
Net income (loss) available to common stockholders – diluted
$807
$(1,246)
$1,345
$(835)
Less:
Preferred stock dividends declared
--
(11)
--
(82)
Adjustment for deferred units of LNC stock in deferred compensation plans
(5)
--
(13)
(1)
Net income (loss)
812
(1,235)
1,358
(752)
Less:
Non-economic market risk benefit impacts, related to net annuity product, after-tax
674
(797)
3,266
52
Net life insurance product features, after-tax
6
(178)
21
(310)
Changes in fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans, after-tax
(5)
(613)
(41)
(633)
Investment gains (losses), after-tax
11
136
16
(744)
Other
(8)
(41)
(737)
(90)
Adjusted income (loss) from operations
$134
$258
$(1,167)
$973
Adjusted income (loss) from operations available to common stockholders$129$246$(1,180)$890
(1) Refer to the full reconciliation of Net Income to Adjusted Income from Operations at the back of this press release.
(2) Prior-year numbers have been adjusted to reflect LDTI accounting.

The 2023 fourth quarter included a $(0.8) billion net loss primarily due to changes in market risk benefits driven by lower interest rates, which more than offset the benefit of higher equity markets.
The 2023 fourth quarter and full year included a $(0.6) billion net loss driven by the change in fair value of an embedded derivative related to the Fortitude Re reinsurance transaction, with a direct offset in other comprehensive income.
The 2023 full year investment gains (losses), after-tax, of $(0.7) billion included a $(0.6) billion loss on the sale of fixed maturity AFS securities as part of the Fortitude Re reinsurance transaction.












Variable Investment Income
image.jpg
Alternative Investment Income, after-tax(1)
For the Three Months Ended
For the Twelve Months Ended
(in millions)
12/31/2022
3/31/2023
6/30/2023
9/30/2023
12/31/2023
12/31/2022
12/31/2023
Annuities
$1
$2
$5
$3
$3
$6
$13
Life Insurance
7
37
53
34
3938
163
Group Protection
1
2
2
2
2
4
7
Retirement Plan Services
1132238
Other Operations
11
Consolidated
$10$42$63$41$46$52$192
(1) Excludes alternative investment income on investments supporting our modified coinsurance and coinsurance with funds withheld agreements as we have limited economic interest in those investments.

Prepayment Income, after-tax
For the Three Months Ended
For the Twelve Months Ended
(in millions)
12/31/2022
3/31/2023
6/30/2023
9/30/2023
12/31/2023
12/31/2022
12/31/2023
Annuities
$1
$1
$—
$1
$1
$24
$2
Life Insurance
5
2
1
2
30
4
Group Protection
5
1
Retirement Plan Services
1
1
18
1
Other Operations
5
Consolidated
$7
$3
$2
$1
$3
$82
$8

Items Impacting Segment Resultsimage.jpg
For the Three Months Ended December 31, 2023
(in millions)
Annuities
Life Insurance
Group Protection
Retirement Plan Services
Other Operations
After-tax segment impacts:
Alternative investment income compared to long-term target(1)
$(1)
$(17)
$(1)
$(1)
Prepayment income(2)
1
2
Annual assumption review
Legal accruals
Total impact
$—
$(15)
$(1)
$(1)
(1) Alternative investment income comparison to long-term target assumes a 10% annual return on the alternative investment portfolio.
(2) Prepayment income is based on actual income reported in the quarter.

The Annuities business recorded a one-time favorable item of $14 million, or $0.08 per diluted share, associated with a model refinement.

Capital and Liquidity image.jpg
For the Three Months Ended
(in millions, except per share data)
12/31/2022
3/31/2023
6/30/2023
9/30/2023
12/31/2023
Holding company available liquidity(1)
$460
$454
$457
$455
$458
RBC Ratio(2)
377%
~380%
~380%
375 - 385%
400 - 410%
Book value per share (BVPS), Including AOCI
$24.32
$33.89
$28.49
$13.04
$34.81
Book value per share (BVPS), Excluding AOCI
$61.86
$56.04
$58.58
$63.03
$55.30
Adjusted book value per share
$65.72
$66.05
$64.37
$63.53
$61.21
(1) Holding company available liquidity presented for the quarters ended 12/31/2022, 3/31/2023 and 6/30/2023 is net of the $500 million prefunding used to repay $500 million of debt that matured in the third quarter of 2023.
(2) The RBC ratio is calculated as of December 31 annually, but is reported in the March statutory reporting, and as such, the quarterly ratios presented for 2023 are considered estimates until the statutory statements are filed.









Annuities
image.jpg
For the Three Months Ended
For the Twelve Months Ended
(in millions)
12/31/2022
3/31/2023
6/30/2023
9/30/2023
12/31/2023(1)
Change
12/31/2022
12/31/2023(1)
Change
Total operating revenues
$1,125
$1,141
$1,190
$1,197
$(525)
NM
$4,482
$3,002
-33.0%
Total operating expenses
806
841
880
915
(846)
NM
3,136
1,789
-43.0%
Income (loss) from operations before taxes
319
300
310
282
321
0.6%
1,346
1,213
-9.9%
Federal income tax expense (benefit)
44
26
39
34
42
-4.5%
185
140
-24.3%
Income (loss) from operations
$275
$274
$271
$248
$279
1.5%
$1,161
$1,073
-7.6%
Income (loss) from operations, excluding impact of annual assumption review
$275
$274
$271
$260
$279
18.2%
$1,160
$1,085
-6.5%
Total sales
$3,210
$3,164
$2,582
$2,728
$4,365
36.0%
$11,879
$12,840
8.1%
Net flows
$152
$(331)
$(1,108)
$(874)
$278
82.9%
$(337)
$(2,034)
NM
Average account balances, net of reinsurance
$142,099
$146,331
$148,260
$151,312
$147,419
3.7%
$149,591
$148,206
-0.9%
Return on average account balances
77757366767872
(1) Day one impacts related to the reinsurance transaction with Fortitude Re caused line-item volatility in the fourth quarter and full-year 2023.

Income from operations was $279 million for the 2023 fourth quarter, essentially unchanged compared to the prior-year quarter.
Total annuity sales were $4.4 billion for the quarter, up 36% from the prior-year quarter. For the 2023 full year, total annuity sales were $12.8 billion, up 8% from the prior year.
Net inflows were $278 million in the quarter, compared to net inflows of $152 million in the prior-year quarter. Full-year net outflows were $2.0 billion, compared to net outflows of $337 million in the prior year.
Average account balances, net of reinsurance, for the quarter were $147 billion, up 4%, compared to $142 billion in the prior-year quarter, primarily driven by growth in RILA. RILA represented 18% of total annuity end-of-year account balances, net of reinsurance, an increase of 4 percentage points compared to the prior-year quarter.

Life Insurance
image.jpg

For the Three Months Ended
For the Twelve Months Ended
(in millions)
12/31/2022
3/31/2023
6/30/2023
9/30/2023
12/31/2023
Change
12/31/2022
12/31/2023
Change
Total operating revenues
$1,688
$1,757
$1,760
$1,723
$1,667
-1.2%
$6,747
$6,907
2.4%
Total operating expenses
1,706
1,780
1,725
1,952
1,681
-1.5%
9,428
7,138
-24.3%
Income (loss) from operations before taxes
(18)
(23)
35
(229)
(14)
22.2%
(2,681)
(231)
91.4%
Federal income tax expense (benefit)
(9)
(10)
2
(56)
(8)
11.1%
(587)
(72)
87.7%
Income (loss) from operations
$(9)
$(13)
$33
$(173)
$(6)
33.3%
$(2,094)
$(159)
92.4%
Income (loss) from operations, excluding impact of annual assumption review
$(9)
$(13)
$33
$(17)
$(6)
33.3%
$13
$(3)
NM
Average account balances, net of reinsurance
$47,963
$49,100
$50,049
$50,130
$45,608
-4.9%
$49,036
$48,722
-0.6%
Total sales
$186
$130
$123
$144
$144
-22.6%
$705
$542
-23.1%

Loss from operations of $(6) million for the quarter, marginal improvement compared to a loss from operations of $(9) million in the prior-year quarter.




Total sales were approximately 23% lower quarter over quarter and year over year, driven by our purposeful shift to a capital-efficient new business mix.
Average account balances, net of reinsurance, were $46 billion, down 5% compared to the prior-year quarter.

Group Protection
image.jpg
For the Three Months Ended
For the Twelve Months Ended
(in millions)
12/31/2022
3/31/2023
6/30/2023
9/30/2023
12/31/2023
Change
12/31/2022
12/31/2023
Change
Total operating revenues
$1,346
$1,388
$1,400
$1,388
$1,387
3.0%
$5,304
$5,563
4.9%
Total operating expenses
1,313
1,299
1,262
1,302
1,322
0.7%
5,252
5,184
-1.3%
Income (loss) from operations before taxes
33
89
138
86
65
97.0%
52
379
NM
Federal income tax expense (benefit)
7
18
29
18
13
85.7%
11
80
NM
Income (loss) from operations
$26
$71
$109
$68
$52
100.0%
$41$299
NM
Income (loss) from operations, excluding impact of annual assumption review
$26
$71
$109
$44
$52
18%
$53
$275
NM
Insurance premiums
$1,213
$1,251
$1,263
$1,251
$1,250
3.1%
$4,768
$5,014
5.2%
Total sales
$356
$128
$96
$71
$398
11.8%
$676
$693
2.5%
Total loss ratio
81.1%
75.0%
71.3%
75.2%
76.6%
82.5%
74.5%
Operating margin
2.1%
5.6%
8.6%
5.4%
4.1%
0.9%
6.0%
Operating margin, excluding impact of annual reserve assumption review
2.1%
5.6%
8.6%
3.5%
4.1%
1.1%
5.5%

Income from operations of $52 million in the quarter doubled compared to $26 million in the prior-year quarter, and the total loss ratio was 76.6% in the quarter compared to 81.1% in the prior-year quarter. These results were primarily driven by favorable experience in Life mortality and disability.
Full-year margin grew over 400 basis points to 5.5%, excluding the benefit from the annual reserve assumption review, driven by disciplined pricing, premium growth, and improved risk results in life and disability.
Insurance premiums were $1.3 billion in the quarter, up 3% compared to the prior-year quarter.
Group Protection sales for the quarter were $398 million in the quarter, up 12% compared to the prior-year quarter, driven by growth across all products and market segments.















Retirement Plan Services
image.jpg

For the Three Months Ended
For the Twelve Months Ended
(in millions)
12/31/2022
3/31/2023
6/30/2023
9/30/2023
12/31/2023
Change
12/31/2022
12/31/2023
Change
Total operating revenues
$325
$328
$334
$327
$322
-0.9%
$1,274
$1,310
2.8%
Total operating expenses
264
277
279
277
278
5.3%
1,027
1,109
8.0%
Income (loss) from operations before taxes
61
51
55
50
44
-27.9%
247
201
-18.6%
Federal income tax expense (benefit)
9
8
8
7
6
-33.3%
36
30
-16.7%
Income (loss) from operations
$52$43$47$43$38
-26.9%
$211$171
-19.0%
Deposits
$2,973
$3,209
$2,897
$2,700
$2,972
0.0%
$12,902
$11,778
-8.7%
Net flows
$51
$535
$201
$(272)
$(332)
NM
$2,696
$132
-95.1%
Average account balances
$87,987
$91,457
$94,099
$96,473
$96,045
9.2%
$90,960
$94,520
3.9%
Return on average account balances
24
19
20
18
16
23
18
    
Income from operations was $38 million in the quarter, a 27% decline compared to the prior-year quarter, primarily driven by higher operating expenses and lower spread income.
Total deposits for the quarter were $3 billion, in line with the prior-year quarter. 2023 full-year deposits were $11.8 billion, down 9% compared to full-year 2022.
Net outflows totaled $332 million for the quarter while the full-year net inflows were $132 million. RPS recorded its ninth consecutive year of positive net flows in 2023.
Average account balances for the quarter were $96 billion, increasing 9% from the prior-year quarter. Ending account balances for full-year 2023 were over $100 billion.

Other Operations
image.jpg
For the Three Months Ended
For the Twelve Months Ended
(in millions)
12/31/2022
3/31/2023
6/30/2023
9/30/2023
12/31/2023(1)
Change
12/31/2022
12/31/2023(1)
Change
Total operating revenues
$47
$43
$46
$38
$(884)
NM
$156
$(755)
NM
Total operating expenses
315
150
181
180
(744)
NM
758
(229)
NM
Income (loss) from operations before taxes
(268)
(107)
(135)
(142)
(140)
47.8%
(602)
(526)
12.6%
Federal income tax expense (benefit)
(58)
(20)
(29)
(29)
(35)
39.7%
(116)
(115)
0.9%
Income (loss) from operations(2)
$(210)
$(87)
$(106)
$(113)
$(105)
50.0%
$(486)
(411)
15.4%
(1) Day one impacts related to the reinsurance transaction with Fortitude Re caused line-item volatility in the fourth quarter and full-year 2023.
(2) Income (loss) from operations does not include preferred dividends.    
                            
Fourth quarter 2022 loss from operations included the net impact of an unfavorable notable item of $116 million, primarily related to legal expenses.

Unrealized Gains and Losses
image.jpg

The Company reported a net unrealized loss of $8.7 billion (pre-tax) on its available-for-sale securities as of December 31, 2023. This compared to a net unrealized loss of $11.9 billion (pre-tax) as of December 31, 2022, with the year-over-year decrease primarily due to the Fortitude Re reinsurance transaction and tighter spread.





The tables attached to this release define and reconcile the non-GAAP measures adjusted income (loss) from operations, adjusted income (loss) from operations available to common stockholders, book value per share, excluding AOCI, and adjusted book value per share to net income (loss), net income (loss) available to common stockholders, and book value per share, 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 fourth quarter 2023 statistical supplement, which is available in the investor relations section of its website http://www.lincolnfinancial.com/investor.

Conference Call Information
Lincoln Financial Group will discuss the company’s fourth-quarter and full-year 2023 results with the investment and analyst community in a conference call beginning at 8:30 a.m. Eastern Time on Thursday, February 8, 2024.

The conference call will be broadcast live through the company’s website at www.lincolnfinancial.com/webcast. Please log on to the webcast at least 15 minutes prior to the start of the conference call to download and install any necessary streaming media software. A replay of the call will be available by 10:30 a.m. Eastern Time on February 8, 2024, at www.lincolnfinancial.com/webcast.

About Lincoln Financial Group
Lincoln Financial Group helps people to plan, protect and retire with confidence. As of December 31, 2023, approximately 17 million customers trust our guidance and solutions across four core businesses – annuities, life insurance, group protection, and retirement plan services. As of December 31, 2023, the company had $295 billion in end-of-period account balances, net of reinsurance. Headquartered in Radnor, Pa., Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE: LNC) and its affiliates. Learn more at LincolnFinancial.com.
Contacts:
Tina MadonSarah Boxler
800-237-2920215-495-8439
Investor RelationsMedia Relations
InvestorRelations@LFG.comSarah.Boxler@LFG.com








Explanatory Notes on Use of Non-GAAP Measures
Management believes that adjusted income (loss) from operations (or adjusted operating income), adjusted income (loss) from operations available to common stockholders, and adjusted income (loss) from operations per diluted share available to common stockholders 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 as 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”), and adjusted book value per share 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 are unpredictable and can fluctuate significantly from period to period, primarily based on changes in interest rates. Adjusted book value per share is useful to investors because it eliminates the effect of items that are unpredictable and can fluctuate significantly from period to period, primarily based on changes in equity markets and 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 Supplements for the corresponding periods contained in the Earnings section of the Investor Relations page on our website: http://www.lincolnfinancial.com/investor.

Definitions of Non-GAAP Measures Used in this Press Release

Adjusted income (loss) from operations, adjusted income (loss) from operations available to common stockholders, book value per share, excluding AOCI, and adjusted book value per share are financial measures we use to evaluate and assess our results. Adjusted income (loss) from operations, adjusted income (loss) from operations available to common stockholders, book value per share, excluding AOCI, and adjusted book value per share, as used in the press release, are non-GAAP financial measures and do not replace GAAP net income (loss), net income (loss) available to common stockholders, and book value per share, including AOCI, 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:
Items related to annuity product features, which include changes in MRBs, including gains and losses and benefit payments (“MRB-related impacts”), changes in the fair value of the derivative instruments we hold to hedge GLB and GDB riders, net of fee income allocated to support the cost of hedging them, and changes in the fair value of the embedded derivative liabilities of our indexed annuity contracts and the associated index options we hold to hedge them, including collateral expense associated with the hedge program (collectively, “net annuity product features”);
Items related to life insurance product features, which include changes in the fair value of derivatives we hold as part of VUL hedging, changes in reserves resulting from benefit ratio unlocking associated with the impact of capital markets, and changes in the fair value of the embedded derivative liabilities of our IUL contracts and the associated index options we hold to hedge them (collectively, “net life insurance product features”);
Credit loss-related adjustments on fixed maturity AFS securities, mortgage loans on real estate and reinsurance-related assets (“credit loss-related adjustments”);
Changes in the fair value of equity securities, certain derivatives, certain other investments and realized gains (losses) on sales, disposals and impairments of financial assets (collectively, “investment gains (losses)”);
Changes in the fair value of reinsurance-related embedded derivatives, trading securities and mortgage loans on real estate electing the fair value option (“changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans”);
Income (loss) from the initial adoption of new accounting standards, regulations and policy changes;
Income (loss) from reserve changes, net of related amortization, on business sold through reinsurance;
Transaction and integration costs related to mergers and acquisitions including the acquisition or divestiture, through reinsurance or other means, of businesses or blocks of business;
Gains (losses) on modification or early extinguishment of debt;
Losses from the impairment of intangible assets and gains (losses) on other non-financial assets; and
Income (loss) from discontinued operations.









Adjusted Income (Loss) from Operations Available to Common Stockholders

Adjusted income (loss) from operations available to common stockholders is defined as after-tax adjusted income (loss) from operations less preferred stock dividends and the adjustment for deferred units of LNC stock in our deferred compensation plans.

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 and preferred stock, 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 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 are unpredictable and 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.

Adjusted Book Value Per Share

Adjusted book value per share is calculated based upon a non-GAAP financial measure.
It is calculated by dividing (a) stockholders’ equity, excluding AOCI, preferred stock and MRB-related impacts by (b) common shares outstanding.
We provide adjusted book value per share to enable investors to analyze the amount of our net worth that is primarily attributable to our business operations.
Management believes adjusted book value per share is useful to investors because it eliminates the effect of market movements that are unpredictable that can fluctuate significantly from period to period, primarily based on changes in equity markets and interest rates.
Book value per share is the most directly comparable GAAP measure.

Other Definitions

Holding Company Available Liquidity

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.

Notable Items

Notable items are 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.

Special Note

Sales

Sales as reported consist of the following:
Annuities and Retirement Plan Services – deposits from new and existing customers;
Universal life insurance (“UL”), indexed universal life insurance (“IUL”), variable universal life insurance (“VUL”) – first-year commissionable premiums plus 5% of excess premiums received;
MoneyGuard® linked-benefit products – MoneyGuard® (UL), 15% of total expected premium deposits, and MoneyGuard Market AdvantageSM (VUL), 150% of commissionable premiums;
Executive Benefits – insurance and corporate-owned UL and VUL, first-year commissionable premiums plus 5% of excess premium received, and single premium bank-owned UL and VUL, 15% of single premium deposits;
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)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2023
2022
2023
2022
Net Income (Loss) Available to Common
Stockholders – Diluted
$
(1,246)
$
807
$
(835)
$
1,345
Less:
Preferred stock dividends declared
(11)
(82)
Adjustment for deferred units of LNC stock our
deferred compensation plans(1)
(5)
(1)
(13)
Net Income (Loss)
(1,235)
812
(752)
1,358
Less:
Net annuity product features, after-tax
(797)
674
52
3,266
Net life insurance product features, after-tax
(178)
6
(310)
21
Credit loss-related adjustments, after-tax
(21)
(8)
(63)
(103)
Investment gains (losses), after-tax (2)
136
11
(744)
16
Changes in the fair value of reinsurance-related
embedded derivatives, trading securities and
certain mortgage loans, after-tax(3)
(613)
(5)
(633)
(41)
Impairment of intangibles
(634)
Transaction and integration costs related to mergers,
acquisitions and divestitures, after-tax (4)
(20)— (27)— 
Total adjustments
(1,493)678 (1,725)2,525 
Adjusted Income (Loss) from Operations
$258 $134 $973 $(1,167)
Add:
Preferred stock dividends(11)— (82)— 
Adjustment for deferred units of LNC stock in our deferred stock compensation plans(1)(5)(1)(13)
Adjusted income (loss) from operations available to common stockholders$246 $129 $890 $(1,180)
Diluted (5)
Net income (loss)
$
(7.35)
$
4.73
$
(4.92)
$
7.78
Adjusted income (loss) from operations
1.45
0.76
5.22
(6.90)
Stockholders’ Equity, Average
Stockholders' equity
$
5,046
$
3,943
$
5,437
$
9,719
Less:
Preferred stock
986
493
986
123
AOCI
(5,979)
(6,646)
(5,563)
(1,022)
Stockholders’ equity, excluding AOCI and preferred stock
10,038
10,096
10,014
10,618
MRB-related impacts
1,314
(1,262)
257
(2,085)
GLB and GDB hedge instruments gains (losses) (6)
(1,857)
N/A
(1,155)
N/A
Adjusted average stockholders' equity
$10,582$11,358$10,912$12,703

(1) We exclude deferred units of LNC stock that are antidilutive from our diluted earnings per share calculation.
(2) Includes an $597 million after-tax loss on the sale of fixed maturity AFS securities as part of the Fortitude Re reinsurance transaction for year ended December 31, 2023.
(3) Includes primarily changes in the fair value of embedded derivatives related to the Fortitude Re reinsurance transaction effective in the fourth quarter of 2023.
(4) Includes costs pertaining to the Fortitude Re reinsurance transaction and the planned sale of our wealth management business.
(5) In periods where a net loss or adjusted loss from operations is presented, basic shares are used in the diluted EPS and adjusted diluted EPS calculations, as the use of diluted shares would result in a lower loss per share.
(6) For periods beginning on or after January 1, 2023, gains (losses) on our GLB and GDB hedge instruments are excluded from adjusted stockholders' equity to align to the updated hedge program.




Lincoln National Corporation
Reconciliation of Book Value per Share
As of December 31,
2023
2022
Book Value Per Common Share
Book value per share
$
34.81
$
24.32
Less:
AOCI
(20.49)
(37.54)
Book value per share, excluding AOCI
55.30
61.86
Less:
MRB-related gains (losses)
6.38
(3.86)
GLB and GDB hedge instruments gains (losses)(1)
(12.29)
N/A
Adjusted book value per share
$
61.21
$
65.72
(1) For periods beginning on or after January 1, 2023, gains (losses) on our GLB and GDB hedge instruments are excluded from adjusted
stockholders’ equity to align to the updated hedge program.
























































Lincoln National Corporation
Digest of Earnings

For the
(in millions, except per share data)
Three Months Ended
December 31,
2023
2022
Revenues
$
700
$
3,841
Net Income (Loss)
$
(1,235)
$
812
Preferred stock dividends declared
(11)
Adjustment for deferred units of LNC stock in our
deferred compensation plans (1)
(5)
Net Income (Loss) Available to Common
Stockholders – Diluted
$
(1,246)
$
807
Earnings (Loss) Per Common Share – Basic
$
(7.35)
$
4.80
Earnings (Loss) Per Common Share – Diluted (2)
(7.35)
4.73
Average Shares – Basic
169,661,997
169,217,427
Average Shares – Diluted
170,422,512
170,632,350
For the
Twelve Months Ended
December 31,
2023
2022
Revenues
$
11,645
$
18,810
Net Income (Loss)
$
(752)
$
1,358
Preferred stock dividends declared
(82)
Adjustment for deferred units of LNC stock in our
deferred compensation plans (1)
(1)
(13)
Net Income (Loss) Available to Common
Stockholders – Diluted
$
(835)
$
1,345
Earnings (Loss) Per Common Share – Basic
$
(4.92)
$
7.93
Earnings (Loss) Per Common Share – Diluted (2)
(4.92)
7.78
Average Shares – Basic
169,562,903
171,034,695
Average Shares – Diluted
170,738,655
172,700,155
(1) We exclude deferred units of LNC stock that are antidilutive from our diluted earnings per share calculation.
(2) In periods where a net loss or adjusted loss from operations is presented, basic shares are used in the diluted EPS and adjusted diluted EPS calculations, as the use of diluted shares would result 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:

Weak general economic and business conditions that may affect demand for our products, account balances, investment results, guaranteed benefit liabilities, premium levels and claims experience;
Adverse global capital and credit market conditions that may 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;
The inability of our subsidiaries to pay dividends to the holding company in sufficient amounts, which 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;
The impact of regulations adopted by the Securities and Exchange Commission (“SEC”), the Department of Labor or other federal or state regulators or self-regulatory organizations that could adversely affect our distribution model and sales of our products and result in additional disclosure and other requirements related to the sale and delivery of our products;
The impact of new and emerging rules, laws and regulations relating to privacy, cybersecurity and artificial intelligence that may lead to increased compliance costs, reputation risk and/or changes in business practices;
Increasing scrutiny and evolving expectations and regulations regarding ESG matters that may adversely affect our reputation and our investment portfolio;
Actions taken by reinsurers to raise rates on in-force business;
Declines in or sustained low interest rates causing a reduction in investment income, the interest margins of our businesses and demand for our products;
Rapidly increasing or sustained high interest rates that may negatively affect our profitability, value of our investment portfolio and capital position and may cause policyholders to surrender annuity and life insurance policies, thereby causing realized investment losses;
The impact of the implementation of the provisions of the European Market Infrastructure Regulation relating to the regulation of derivatives transactions;
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; and an increase in liabilities related to guaranteed benefit riders, which are accounted for as market risk benefits, of our subsidiaries’ variable annuity products;
Ineffectiveness of our risk management policies and procedures, including our various hedging strategies;
A deviation in actual experience regarding future policyholder behavior, mortality, morbidity, interest rates or equity market returns from the assumptions used in pricing our subsidiaries’ products and in establishing related insurance reserves, which may reduce future earnings;
Changes in accounting principles that may affect our consolidated 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;
Interruption in telecommunication, information technology or other operational systems or failure to safeguard the confidentiality or privacy of sensitive data on such systems, including from cyberattacks or other breaches of our data security systems;




The effect of acquisitions and divestitures, including the inability to realize the anticipated benefits of acquisitions and dispositions of businesses and potential operating difficulties and unforeseen liabilities relating thereto, as well as the effect of restructurings, product withdrawals and other unusual items;
The inability to realize or sustain the benefits we expect from, greater than expected investments in, and the potential impact of efforts related to, our strategic initiatives, including the Spark Initiative;
The adequacy and collectability of reinsurance that we have obtained;
Pandemics, acts of terrorism, war or other man-made and natural catastrophes that may adversely impact liabilities for policyholder claims, affect our businesses and increase 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, 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 correct or 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.



image12.jpg







Lincoln Financial Group
Table of Contents
Notes1
Credit Ratings2
Consolidated
Consolidated Statements of Income (Loss)3
Consolidated Balance Sheets4
Earnings, Shares and Return on Equity5
Key Stakeholder Metrics6
Select Earnings Drivers By Segment7
Sales By Segment8
Operating Revenues and General and Administrative Expenses By Segment9
Operating Commissions and Other Expenses10
Select Earnings and Operational Data from Business Segments
Annuities11
Life Insurance12
Group Protection13
Retirement Plan Services14
Other Operations 15
DAC & Account Balance Roll Forwards
Consolidated DAC, VOBA, DSI and DFEL Roll Forwards16
Account Balance Roll Forwards:
Annuities17
Life Insurance18
Retirement Plan Services19
Investment Information
Fixed-Income Asset Class20
Fixed-Income Credit Quality21
GAAP to Non-GAAP Reconciliations
Select GAAP to Non-GAAP Reconciliations22-24








Lincoln Financial Group
Notes
Non-GAAP Performance Measures
Non-GAAP measures do not replace the most directly comparable GAAP measures, and we have included detailed reconciliations herein beginning on page 22.
Adjusted Income (Loss) From Operations
Adjusted income (loss) from operations is GAAP net income excluding the after-tax effects of the following items, as applicable:
• Items related to annuity product features, which include changes in market risk benefits (“MRBs”), including gains and losses and benefit payments (“MRB-related impacts”), changes in the fair
value of the derivative instruments we hold to hedge guaranteed living benefit (“GLB”) and guaranteed death benefit (“GDB”) riders, net of fee income allocated to support the cost of hedging them,
and changes in the fair value of the embedded derivative liabilities of our indexed annuity contracts and the associated index options we hold to hedge them, including collateral expense associated with
the hedge program (collectively, “net annuity product features”);
• Items related to life insurance product features, which include changes in the fair value of derivatives we hold as part of variable universal life insurance (“VUL”) hedging, changes in reserves resulting
from benefit ratio unlocking associated with the impact of capital markets, and changes in the fair value of the embedded derivative liabilities of our indexed universal life insurance (“IUL”) contracts
and the associated index options we hold to hedge them (collectively, “net life insurance product features”);
• Credit loss-related adjustments on fixed maturity available for sale (“AFS”) securities, mortgage loans on real estate and reinsurance-related assets (“credit loss-related adjustments”);
• Changes in the fair value of equity securities, certain derivatives, certain other investments and realized gains (losses) on sales, disposals and impairments of financial assets (collectively, “investment
gains (losses)”);
• Changes in the fair value of reinsurance-related embedded derivatives, trading securities and mortgage loans on real estate electing the fair value option (“changes in the fair value of reinsurance-related
embedded derivatives, trading securities and certain mortgage loans”);
• Income (loss) from the initial adoption of new accounting standards, regulations and policy changes;
• Income (loss) from reserve changes, net of related amortization, on business sold through reinsurance;
• Transaction and integration costs related to mergers and acquisitions including the acquisition or divestiture, through reinsurance or other means, of businesses or blocks of business;
• Gains (losses) on modification or early extinguishment of debt;
• Losses from the impairment of intangible assets and gains (losses) on other non-financial assets; and
• Income (loss) from discontinued operations.
Adjusted income (loss) from operations available to common stockholders is defined as after-tax adjusted income (loss) from operations less preferred stock dividends and the adjustment for deferred
units of LNC stock in our deferred compensation plans.
Adjusted Operating Revenues
Adjusted operating revenues represent GAAP revenues excluding the pre-tax effects of the following items, as applicable:
• Changes in the fair value of the derivative instruments we hold to hedge GLB and GDB riders, net of fee income allocated to support the cost of hedging them, and changes in the fair value of the
embedded derivative liabilities of our indexed annuity and indexed universal life insurance contracts and the associated index options we hold to hedge them (“revenue adjustments from annuity and
life insurance product features”);
• Credit loss-related adjustments;
• Investment gains (losses);
• Changes in the fair value of reinsurance-related embedded derivatives, trading securities and certain mortgage loans;
• Revenue adjustments from the initial adoption of new accounting standards; and
• Amortization of deferred gains arising from reserve changes on business sold through reinsurance.
Management believes that the non-GAAP performance measures discussed above 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 (loss)
from operations provide investors with more valuable measures of our performance as they better reveal trends in our business.
Page 1a


Lincoln Financial Group
Notes
Non-GAAP Performance Measures, Continued
Stockholders’ Equity, Excluding AOCI and Preferred Stock
Stockholders’ equity, excluding AOCI and preferred stock is stockholders’ equity, excluding AOCI and preferred stock. Management believes this metric is useful to investors because it eliminates market
movements that are unpredictable and can fluctuate significantly from period to period, primarily related to changes in interest rates. Stockholders’ equity is the most directly comparable GAAP measure.
Adjusted Stockholders’ Equity
For presented periods prior to January 1, 2023, adjusted stockholders’ equity is stockholders’ equity, excluding AOCI, preferred stock and MRB-related impacts. For periods beginning on or after January 1, 2023,
adjusted stockholders’ equity is stockholders’ equity, excluding AOCI, preferred stock, MRB-related impacts and GLB and GDB hedged instruments gains (losses), to align to updates made to our variable
annuity hedge program effective January 1, 2023. Management believes this metric is useful to investors because it eliminates the effect of market movements that are unpredictable and can fluctuate significantly
from period to period, primarily related to changes in equity markets and interest rates. Stockholders’ equity is the most directly comparable GAAP measure.
Book Value per Share, Excluding AOCI
Book value per share, excluding AOCI, is calculated by dividing stockholders’ equity, excluding AOCI and preferred stock, 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 are unpredictable and 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.
Adjusted Book Value per Share
Adjusted book value per share is calculated by dividing stockholders’ equity, excluding AOCI, preferred stock and MRB-related impacts, by common shares outstanding. We provide adjusted book value per share
to enable investors to analyze the amount of our net worth that is attributable primarily to our business operations. Management believes adjusted book value per share is useful to investors because it eliminates
the effect of items that are unpredictable and can fluctuate significantly from period to period, primarily based on changes in equity markets and interest rates. Book value per share is the most directly
comparable GAAP measure.
Adjusted Income (Loss) From Operations Available to Common Stockholders, Excluding AOCI and Preferred Stock ROE
Adjusted income (loss) from operations available to common stockholders, excluding AOCI and preferred stock ROE is calculated by dividing annualized adjusted income (loss) from operations available
to common stockholders by average stockholders’ equity, excluding AOCI and preferred stock. Management believes this metric is useful to investors because it eliminates the effect of market movements
on ROE that are unpredictable and can fluctuate significantly from period to period, primarily related to changes in interest rates. Net income (loss) ROE is the most directly comparable GAAP measure.
Adjusted Income (Loss) From Operations ROE
Adjusted income (loss) from operations ROE is calculated by dividing annualized adjusted income (loss) from operations available to common stockholders by adjusted average stockholders’ equity.
Management believes this metric is useful to investors because it eliminates the effect of market movements on ROE that are unpredictable and can fluctuate significantly from period to period, primarily
related to changes in equity markets and interest rates. Net income (loss) ROE is the most directly comparable GAAP measure.
Management believes that the non-GAAP measures discussed above allow 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.
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.
• We exclude deferred units of LNC stock that are antidilutive from our diluted earnings per share calculation. 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.
• 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.
Page 1b


Lincoln Financial Group
Notes
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.
Return on equity (“ROE”) measures how efficiently we generate profits from the resources provided by our net assets. See adjusted income (loss) from operations ROE and adjusted income (loss) from
operations available to common stockholders, excluding AOCI and preferred stock ROE metrics on page 1b for further information on how these metrics are calculated. Management evaluates consolidated
ROE by both including and excluding the effect of average goodwill.
Leverage ratio is a measure that we use to monitor the level of our debt relative to our total capitalization. Debt used in this metric reflects total debt and preferred stock adjusted for certain items.
Total capitalization reflects debt used in the numerator of this ratio and stockholders' equity adjusted for certain items.
Indexed variable annuities are referred to as registered index-linked annuities (“RILA”).
Sales as reported consist of the following:
• Annuities and Retirement Plan Services – deposits from new and existing customers;
• Universal life insurance (“UL”), IUL, VUL – first-year commissionable premiums plus 5% of excess premiums received;
MoneyGuard® linked-benefit products – MoneyGuard® (UL), 15% of total expected premium deposits, and MoneyGuard Market AdvantageSM (VUL), 150% of commissionable premiums;
• Executive Benefits – insurance and corporate-owned UL and VUL, first-year commissionable premiums plus 5% of excess premium received, and single premium bank-owned UL and VUL, 15% of
      single premium deposits;
• Term – 100% of annualized first-year premiums; and
• Group Protection – annualized first-year premiums from new policies.
Statistical Supplement is Dated
This document is dated February 8, 2024, and has not been updated since that date. Lincoln Financial Group does not intend to update this document.
Page 1c


Lincoln Financial Group
Credit Ratings
Ratings as of February 8, 2024
Standard
AM BestFitchMoody's& Poor's
Senior Debt Ratingsbbb+BBB+Baa2BBB+
Financial Strength Ratings
The Lincoln National Life Insurance CompanyAA+A2A+
First Penn-Pacific Life Insurance CompanyAA+A2A-
Lincoln Life & Annuity Company of New YorkAA+A2A+
Investor Inquiries May Be Directed To:
Tina Madon, Senior Vice President, Investor Relations
Email: InvestorRelations@lfg.com
Phone: 800-237-2920
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Lincoln Financial Group
Consolidated Statements of Income (Loss)
Unaudited (millions of dollars, except per share data)
For the Three Months EndedFor the Twelve Months Ended
12/31/223/31/236/30/239/30/2312/31/23Change12/31/2212/31/23Change
Revenues
Insurance premiums $1,564 $1,579 $1,612 $1,566 $(1,086)NM$6,087 $3,672 -39.7 %
Fee income1,354 1,379 1,365 1,363 1,361 0.5 %5,604 5,467 -2.4 %
Net investment income1,412 1,466 1,508 1,494 1,411 -0.1 %5,514 5,879 6.6 %
Realized gain (loss)(692)(828)(1,784)(453)(1,245)-79.9 %840 (4,311)NM
Amortization of deferred gain (loss) on business
sold through reinsurance10 15 -60.0 %43 38 -11.6 %
Other revenues193 209 219 218 255 32.1 %722 900 24.7 %
Total revenues3,841 3,814 2,929 4,203 700 -81.8 %18,810 11,645 -38.1 %
Expenses
Benefits2,220 2,291 2,192 2,152 (497)NM8,479 6,138 -27.6 %
Interest credited744 785 808 831 824 10.8 %2,877 3,248 12.9 %
Market risk benefit (gain) loss(1,567)619 (2,023)(1,428)568 136.2 %(3,246)(2,264)30.3 %
Policyholder liability remeasurement (gain) loss(52)(118)(110)159 (84)-61.5 %2,766 (152)NM
Commissions and other expenses1,385 1,300 1,335 1,335 1,369 -1.2 %5,125 5,339 4.2 %
Interest and debt expense77 83 84 84 81 5.2 %283 331 17.0 %
Spark program expense49 24 41 36 52 6.1 %167 153 -8.4 %
Impairment of intangibles— — — — — NM634 — -100.0 %
Total expenses2,856 4,984 2,327 3,169 2,313 -19.0 %17,085 12,793 -25.1 %
Income (loss) before taxes985 (1,170)602 1,034 (1,613)NM1,725 (1,148)NM
Federal income tax expense (benefit)173 (289)91 181 (378)NM367 (396)NM
Net income (loss)812 (881)511 853 (1,235)NM1,358 (752)NM
Preferred stock dividends declared— (25)(11)(34)(11)NM— (82)NM
Adjustment for deferred units of LNC stock
in our deferred compensation plans(5)(3)— — 100.0 %(13)(1)92.3 %
Net income (loss) available to common
stockholders – diluted$807 $(909)$502 $819 $(1,246)NM$1,345 $(835)NM
Earnings (Loss) Per Common Share – Diluted
Net income (loss)$4.73 $(5.37)$2.94 $4.79 $(7.35)NM$7.78 $(4.92)NM
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Lincoln Financial Group
Consolidated Balance Sheets
Unaudited (millions of dollars)
As of
12/31/223/31/236/30/239/30/2312/31/23Change
ASSETS
Investments:
Fixed maturity available-for-sale (“AFS”) securities, net of allowance for
credit losses:
Corporate bonds$79,023 $80,448 $79,307 $76,001 $69,657 -11.9%
U.S. government bonds379 383 371 373 393 3.7%
State and municipal bonds5,070 5,257 5,074 4,770 2,790 -45.0%
Foreign government bonds318 309 281 273 283 -11.0%
Residential mortgage-backed securities 2,009 2,050 2,015 1,928 1,773 -11.7%
Commercial mortgage-backed securities 1,674 1,671 1,684 1,701 1,424 -14.9%
Asset-backed securities10,904 11,458 11,793 12,393 12,171 11.6%
Hybrid and redeemable preferred securities359 360 365 365 247 -31.2%
Total fixed maturity AFS securities, net of allowance for credit losses99,736 101,936 100,890 97,804 88,738 -11.0%
Trading securities3,498 3,266 2,943 2,788 2,359 -32.6%
Equity securities427 414 403 383 306 -28.3%
Mortgage loans on real estate, net of allowance for credit losses18,301 18,327 18,460 18,751 18,963 3.6%
Policy loans2,359 2,383 2,423 2,428 2,476 5.0%
Derivative investments3,594 4,005 5,155 5,790 6,474 80.1%
Other investments3,739 3,892 4,195 4,551 5,015 34.1%
Total investments131,654 134,223 134,469 132,495 124,331 -5.6%
Cash and invested cash3,343 3,766 3,768 2,529 3,365 0.7%
Deferred acquisition costs, value of business acquired and deferred sales inducements12,235 12,277 12,316 12,341 12,397 1.3%
Reinsurance recoverables, net of allowance for credit losses19,953 19,827 19,571 18,924 29,843 49.6%
Deposit assets, net of allowance for credit losses11,628 12,249 12,308 12,494 28,789 147.6%
Market risk benefit assets2,807 3,445 3,906 4,108 3,894 38.7%
Accrued investment income1,253 1,277 1,277 1,372 1,082 -13.6%
Goodwill1,144 1,144 1,144 1,144 1,144 0.0%
Other assets7,193 7,050 7,166 7,744 9,311 29.4%
Separate account assets143,536 148,421 153,246 145,810 158,257 10.3%
Total assets$334,746 $343,679 $349,171 $338,961 $372,413 11.3%
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Lincoln Financial Group
Consolidated Balance Sheets
Unaudited (millions of dollars)
As of
12/31/223/31/236/30/239/30/2312/31/23Change
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Policyholder account balances$114,435 $116,167 $117,598 $117,210 $120,737 5.5 %
Future contract benefits38,826 39,757 39,711 39,362 39,864 2.7 %
Funds withheld reinsurance liabilities2,256 2,308 2,352 2,397 14,336 NM
Market risk benefit liabilities2,078 1,976 1,548 1,385 1,716 -17.4 %
Deferred front-end loads5,091 5,291 5,494 5,695 5,901 15.9 %
Payables for collateral on investments6,712 6,803 7,062 8,046 8,105 20.8 %
Short-term debt500 500 500 — 250 -50.0 %
Long-term debt by rating agency leverage definitions:
Operating (see note (2) on page 6 for details)
867 867 867 867 867 0.0%
Financial5,088 5,107 5,087 5,038 4,832 -5.0 %
Other liabilities 10,255 9,750 9,887 9,952 10,655 3.9 %
Separate account liabilities143,536 148,421 153,246 145,810 158,257 10.3 %
Total liabilities329,644 336,947 343,352 335,762 365,520 10.9 %
Stockholders’ Equity
Preferred stock986 986 986 986 986 0.0%
Common stock4,544 4,560 4,575 4,591 4,605 1.3 %
Retained earnings5,924 4,940 5,362 6,102 4,778 -19.3 %
Accumulated other comprehensive income (loss):
Unrealized investment gain (loss)(8,528)(6,754)(7,267)(10,163)(4,813)43.6 %
Market risk benefit non-performance risk gain (loss)1,741 2,766 1,842 998 1,070