Lincoln Financial Group



Table of Contents







Notes



Consolidated



Consolidated Statements of Income (Loss)



Consolidated Balance Sheets



Earnings, Shares and Return on Equity



Key Stakeholder Metrics



Operating Revenues and General and Administrative Expenses by Segment



Select Earnings and Operational Data from Business Segments



Income (Loss) from Operations Summary



Life Insurance



Annuities



Group Protection



Retirement Plan Services



Other Operations



Account Balance Roll Forwards



Life Insurance



Annuities



Retirement Plan Services



Other Information



Select GAAP to Non-GAAP Reconciliations































Lincoln Financial Group



Notes







Basis of Presentation



On March 30, 2023, we filed a Form 10-K/A including restated audited consolidated financial statements for the years ended December 31, 2022 and December 31, 2021, as well as unaudited restated interim



financial information for the quarterly periods in 2022 and 2021.  As disclosed in the Form 10-K/A, the restatement corrected the accounting treatment for our fourth quarter 2021 reinsurance transaction with



Resolution Life, as well as corrected previously identified errors that the Company determined to be immaterial, both individually and in the aggregate. Accordingly, we have adjusted the prior period information



in this condensed Statistical Supplement as applicable.  Revised solely for the correction of the accounting treatment for the reinsurance transaction, for the fourth quarter of 2021 and full year 2022, the



Company's financial results included a one-time gain of $498 million in net income for the quarter ended December 31, 2021, rather than amortizing $25 million and $6 million of the gain that was reflected in



net income during the year ended December 31, 2022 and the quarter ended December 31, 2021, respectively. As of year-end December 31, 2022 and December 31, 2021, the Company’s stockholders’ equity



increased by $467 million and $492 million, respectively, and the Company’s leverage ratio as of year-end December 31, 2022 improved by approximately 80 basis points as a result of the correction of the



accounting treatment.





In addition, as of January 1, 2023, we adopted the provisions of Accounting Standards Update No. 2018-12, “Targeted Improvements to the Accounting for Long-Duration Contracts and related amendments”



(“LDTI”) and retrospectively restated all prior periods presented in this condensed Statistical Supplement.  The amended guidance was applied as of the beginning of the earliest period presented in the



Company's quarterly and annual financial statements, which resulted in a January 1, 2021 transition date.  The information in this restated condensed Statistical Supplement reflecting the impacts of the



adoption of LDTI is being provided at this time voluntarily and for comparative purposes only.  The following summarizes the increase (decrease) to net income (loss) and adjusted income (loss) from



operations by segment (in millions) as a result of the adoption of LDTI:





For the Twelve



For the Three Months Ended

Months Ended



3/31/22

6/30/22

9/30/22

12/31/22

12/31/21

12/31/22





LDTI Impacts to Net Income (Loss)

$

$

$

$

$

$





LDTI Impacts to Adjusted Income (Loss) from Operations, After-Tax(1)



Life Insurance

$

$

$

$

$

$



Annuities(2)



Group Protection



Retirement Plan Services



Other Operations



Impacts to adjusted income (loss) from operations, after-tax(2)

$

$

$

$

$

$





(1) Adjusted income (loss) from operations is a non-GAAP performance measure. See definition on page 1b and reconciliation to net income on page 16.



(2) Includes $217 million impact of our third quarter 2022 annual assumption review on reserves that are now classified as MRBs under LDTI.  Excluding



this impact, the adoption of LDTI had a minimal impact on annual adjusted income (loss) from operations.





The following summarizes the increase (decrease) to net income (loss) and adjusted income (loss) from operations per common share - diluted as a result of the adoption of LDTI:





For the Twelve



For the Three Months Ended

Months Ended



3/31/22

6/30/22

9/30/22

12/31/22

12/31/21

12/31/22



Impacts on net income (loss) (diluted), per common share

$

$

$

$

$

$



Impacts on adjusted income (loss) from operations (diluted),



per common share





Page 1a





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 16.





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:



• Changes in market risk benefits (“MRBs”), including gains and losses and benefit payments (“MRB-related impacts”);



• Realized gains and losses associated with the following (“excluded realized gain (loss)”):



▪ Changes in the carrying value of mortgage loans on real estate attributable to current expected credit losses (“CECL”) (“changes in CECL reserve for mortgage loans on real estate”);



▪ Changes in the carrying value of reinsurance-related assets attributable to CECL (“changes in CECL reserve for reinsurance-related assets”);



▪ Changes in the carrying value of fixed maturity AFS securities attributable to the estimation of credit losses (“changes in the credit loss allowance for fixed maturity AFS securities”);



▪ Changes in the fair value of investments, including trading securities, equity securities, certain derivatives, and mortgage loans on real estate electing the fair value option, and of



embedded derivatives within certain reinsurance arrangements, as well as sales or disposals of investments (“changes in investments and reinsurance-related embedded derivatives”);



▪ Changes in the fair value of the derivative instruments we hold to hedge GLB and GDB riders (“changes in fair value of GLB and GDB hedge instruments”);



▪ Fee income allocated to support the cost of hedging GLB and GDB riders (“GLB and GDB hedge allowance”);



▪ Changes in the fair value of the embedded derivative liabilities of our indexed annuity and indexed universal life insurance contracts (“changes in fair value of indexed product liabilities”); and



▪ Changes in the fair value of index options we hold to hedge the change in the fair value of the embedded derivative liabilities of our indexed annuity and indexed universal life insurance contracts



(“changes in fair value of indexed product hedge instruments”);



• Changes in reserves resulting from benefit ratio unlocking on variable universal life insurance products with secondary guarantees (“benefit ratio unlocking”);



• 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 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; 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 1b





Lincoln Financial Group



Notes







Non-GAAP Performance Measures, Continued



Stockholders’ Equity, Excluding AOCI and Preferred Stock



Stockholders’ equity, excluding AOCI 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.  Stockholders’ equity is the most directly comparable



GAAP measure.





Adjusted Income (Loss) From Operations, Excluding AOCI and Preferred Stock ROE



Adjusted income (loss) from operations, excluding AOCI and preferred stock ROE is calculated by dividing annualized adjusted income (loss) from operations 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 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 1c





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, excluding AOCI and preferred stock ROE metrics on page 1c for further information on how these metrics are calculated. Management evaluates consolidated ROE by both including and excluding



the effect of average goodwill.





Statistical Supplement is Dated



This document is dated April 6, 2023, and has not been updated since that date.  Lincoln Financial Group does not intend to update this document.







Investor Inquiries May Be Directed To:



Albert Copersino, Vice President, Investor Relations



Email:  InvestorRelations@lfg.com



Phone:  203-257-4493























































Page 1d





Lincoln Financial Group



Consolidated Statements of Income (Loss)



Unaudited (millions of dollars, except per share data)





For the Three Months Ended

For the Twelve Months Ended



3/31/22

6/30/22

9/30/22

12/31/22

12/31/21

12/31/22

Change



Revenues



Insurance premiums

$

$

$

$

$

$



Fee income

-7.2%



Net investment income

-9.8%



Realized gain (loss)



Amortization of deferred gain on business



sold through reinsurance



Other revenues

-7.1%



Total revenues





Expenses



Benefits

-0.3%



Interest credited

-1.8%



Market risk benefit (gain) loss



Policyholder liability remeasurement (gain) loss

NM



Commissions and other expenses

-1.8%



Interest and debt expense



Spark program expense



Impairment of intangibles

 -

 -

 -

 -

NM



Total expenses



Income (loss) before taxes

-62.8%



Federal income tax expense (benefit)

-57.6%



Net income (loss)

-64.1%



Adjustment for deferred units of LNC stock



in our deferred compensation plans

NM



Net income (loss) available to common



stockholders – diluted

$

$

$

$

$

$

-64.5%





Earnings (Loss) Per Common Share – Diluted



Net income (loss)

$

$

$

$

$

$

-61.0%















Page 2





Lincoln Financial Group



Consolidated Balance Sheets



Unaudited (millions of dollars)





As of



12/31/21

3/31/22

6/30/22

9/30/22

12/31/22

Change



ASSETS



Investments:



Fixed maturity available-for-sale (“AFS”) securities, net of allowance for



credit losses: