LINCOLN NATIONAL CORP - FORM 8-K - EX-99.2 - LINCOLN NATIONAL CORPORATION STATISTICAL SUPPLEMENT

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8-K - FORM 8-K - LINCOLN NATIONAL CORP	lincoln8k.htm
EX-99.1 - PRESS RELEASE - LINCOLN NATIONAL CORP	ex99-1.htm

Lincoln Financial Group
Table of Contents


Analyst Coverage		1
Notes		2
Consolidated Statements of Income (Loss)		3
Consolidated Balance Sheets		4
Earnings, Shares, Return on Equity and Return to Stockholder Highlights		5
Income (Loss) from Operations, Average Equity and ROE By Segment		6
Select Earnings Drivers By Segment		7
Deposits, Net Flows and Account Balances 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 Investment Data		13
Realized Gain (Loss) and Benefit Ratio Unlocking, After-DAC		14
Select Liquidity and Ratings Agency Data		15
Select Earnings and Operational Data:
	Annuities	16
	Retirement Plan Services	17
	Life Insurance	18
	Group Protection	19
	Other Operations and Discontinued Operations	20
DAC, VOBA, DSI and DFEL Roll Forwards:
	Consolidated	21
	Annuities	22
	Retirement Plan Services, Life Insurance and Group Protection	23
Account Value Roll Forwards:
	Annuities	24
	Retirement Plan Services	25
	Life Insurance	26
Select Non-GAAP to GAAP Reconciliations		27

Lincoln Financial Group
Analyst Coverage


Firm	Analyst	Phone Number
Bank of America - Merrill Lynch	Ed Spehar	646-855-1744
Barclays Capital	Jay Gelb	212-526-1561
Credit Suisse	Tom Gallagher	212-538-2010
Dowling and Partners	Ryan Krueger	860-676-8600
Evercore Partners	Mark Finkelstein	312-445-6440
FBR Capital Markets	Randy Binner	703-312-1890
Goldman Sachs and Company	Christopher Giovanni	212-357-3560
JP Morgan Securities	Jimmy Bhullar	212-622-6397
Keefe, Bruyette and Woods	Jeff Schuman	860-722-5902
Langen McAlenney	Bob Glasspiegel	860-724-1203
Macquarie Capital	Sean Dargan	212-231-0663
Morgan Stanley	Nigel Dally	212-761-4132
Raymond James and Associates	Steven Schwartz	312-612-7686
RBC Capital	Eric Berg	212-618-7593
Sandler O'Neil and Partners	Edward Shields	312-281-3487
Scotia Capital	Joanne Smith	212-225-5071
Sterne, Agee and Leach, Inc.	John Nadel	212-338-4717
UBS	Suneet Kamath	212-713-1355
Wells Fargo Securities	John Hall	212-214-8032


Investor Inquiries May Be Directed To
Jim Sjoreen, Senior Vice President, Investor Relations
Email: Jim.Sjoreen@lfg.com
Voice: 484-583-1420
Fax: 484-583-3962


Notes
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.

Lincoln Financial Group's Statistical Supplement will be available immediately after the release of earnings for each quarter through our Investor Relations website: www.LincolnFinancial.com/investor.

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 because 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 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 loss from continuing operations is experienced, shares used in the diluted EPS calculation represent basic shares, as using dilutive shares would be anti-dilutive to the calculation. In these periods, we would also exclude the deferred compensation adjustment.

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 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 assuming the conversion of our Series A preferred shares. 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.

Basis of Presentation
We adopted the provisions of ASU 2010-26 “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts” (“ASU 2010-26”) effective January 1, 2012, and elected to retrospectively restate all prior periods. ASU 2010-26 clarified the types of costs incurred by an insurance entity that can be capitalized in the acquisition of insurance contracts. Only those costs incurred that result directly from and are essential to the successful acquisition of new or renewal insurance contracts may be capitalized as deferred acquisition costs ("DAC"). The determination of deferability must be made on a contract-level basis.

Certain other amounts reported in prior periods have been reclassified to the presentation adopted in the current period. These reclassifications had no effect on net income, income from operations or stockholders' equity in the prior periods.

Definitions
Holding company available cash consists of cash and cash equivalents, investments maturing in one year or less at origination and receivables under the inter-company cash management program, less payables under the inter-company cash management program, payables from purchases of securities not settled as of the balance sheet date and commercial paper outstanding.

Sales as reported consist of the following:
	•	Universal life ("UL") (excluding linked-benefit products) and variable universal life ("VUL"), including corporate-owned life insurance ("COLI") and bank-owned life insurance ("BOLI") - first year commissionable premiums plus 5% of excess premiums received, including an adjustment for internal replacements at approximately 50% of target;
	•	Whole life and term - 100% of first year paid premiums;
	•	Linked-benefit - 15% of premium deposits;
	•	Annuities - deposits from new and existing customers; and
	•	Group Protection - annualized first year premiums from new policies.

Page 2a

Lincoln Financial Group
Notes


Throughout the document, "after-DAC" refers to the associated amortization expense of DAC, value of business acquired ("VOBA"), deferred sales inducements ("DSI") and DFEL and changes in other contract holder funds.

Non-GAAP Performance Measures
Non-GAAP measures do not replace the most directly comparable GAAP measures, and we have included detailed reconciliations herein.

We exclude the after-tax effects of the following items from GAAP net income (loss) to arrive at income (loss) from operations:
	•	Realized gains and losses associated with the following ("excluded realized gain (loss)"):
		▪	Sales or disposals and impairments of 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 reflected within variable annuity net derivative results;
		▪	Changes in the fair value of the embedded derivatives of our guaranteed living benefit ("GLB") riders accounted for at fair value, net of the change in the fair value of the derivatives we own to hedge them reflected within variable annuity net derivative results; and
		▪	Changes in the fair value of the embedded derivative liabilities related to index call options we may purchase 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 option");
	•	Changes in reserves resulting from benefit ratio unlocking on our GDB and GLB riders ("benefit ratio unlocking") reflected within variable annuity net derivative results;
	•	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; and
	•	Income (loss) from the initial adoption of new accounting standards.

Operating revenues represent GAAP revenues excluding the pre-tax effects of the following items:
	•	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.

We use our federal income tax rate of 35% while taking into account any permanent differences for events recognized differently in our financial statements and federal income tax returns when reconciling our non-GAAP measures to the most comparable GAAP measure.

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 because 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 operating revenues and income from operations provide investors with more valuable measures of our performance because they better reveal trends in our business.

Statistical Supplement is Dated
The financial data in this document is dated August 1, 2012, and has not been updated since that date. Lincoln Financial Group does not intend to update this document.

Page 2b

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

	For the Three Months Ended																		For the Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
Revenues
Insurance premiums	$	594		$	559		$	573		$	589		$	630			6.1	%	$	1,162		$	1,219			4.9	%
Insurance fees		900			864			854			907			887			-1.4	%		1,718			1,794			4.4	%
Net investment income		1,181			1,151			1,129			1,166			1,197			1.4	%		2,372			2,362			-0.4	%
Realized gain (loss):
Other-than-temporary impairment ("OTTI")		(31	)		(26	)		(25	)		(47	)		(33	)		-6.5	%		(72	)		(80	)		-11.1	%
Realized gain (loss), excluding OTTI		22			(137	)		(99	)		(38	)		76			95.5	%		65			37			-43.1	%
Total realized gain (loss)		(9	)		(163	)		(124	)		(85	)		43		NM				(7	)		(43	)	NM
Amortization of deferred gains on business sold through reinsurance		19			19			19			19			18			-5.3	%		37			38			2.7	%
Other revenues and fees		122			117			117			118			124			1.6	%		244			244			0.0	%
Total revenues		2,807			2,547			2,568			2,714			2,899			3.3	%		5,526			5,614			1.6	%

Expenses
Interest credited		625			625			624			625			616			-1.4	%		1,239			1,241			0.2	%
Benefits		1,027			664			819			858			945			-8.0	%		1,862			1,804			-3.1	%
Commissions and other expenses		674			1,024			797			856			828			22.8	%		1,443			1,684			16.7	%
Interest and debt expense		72			79			70			68			68			-5.6	%		144			135			-6.3	%
Impairment of intangibles		-			-			747			-			-		NM				-			-		NM
Total expenses		2,398			2,392			3,057			2,407			2,457			2.5	%		4,688			4,864			3.8	%
Income (loss) from continuing operations before taxes		409			155			(489	)		307			442			8.1	%		838			750			-10.5	%
Federal income tax expense (benefit)		105			(6	)		50			61			118			12.4	%		221			180			-18.6	%
Income (loss) from continuing operations		304			161			(539	)		246			324			6.6	%		617			570			-7.6	%
Income (loss) from discontinued operations		-			(8	)		-			(1	)		-		NM				-			(1	)	NM
Net income (loss)		304			153			(539	)		245			324			6.6	%		617			569			-7.8	%
Adjustment for LNC stock units in our deferred compensation plans		(1	)		(6	)		-			-			(4	)	NM				-			2		NM
Net income (loss) available to common stockholders - diluted	$	303		$	147		$	(539	)	$	245		$	320			5.6	%	$	617		$	571			78.4	%

Earnings (Loss) Per Common Share - Diluted
Income (loss) from continuing operations	$	0.95		$	0.50		$	(1.81	)	$	0.83		$	1.10			15.8	%	$	1.92		$	1.94			1.0	%
Income (loss) from discontinued operations		-			(0.03	)		-			-			-		NM				-			-		NM
Net income (loss)	$	0.95		$	0.47		$	(1.81	)	$	0.83		$	1.10			15.8	%	$	1.92		$	1.94			1.0	%

Page 3

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

	As of
	06/30/11		09/30/11		12/31/11		03/31/12		06/30/12		Change
ASSETS
Investments:
Available-for-sale ("AFS") securities:
Corporate bonds	$	54,830	$	58,263	$	59,261	$	60,599	$	63,914		16.6	%
U.S. government bonds		240		286		494		486		517		115.4	%
Foreign government bonds		594		642		733		650		664		11.8	%
Mortgage-backed securities		10,334		10,118		9,639		9,095		8,504		-17.7	%
Asset-backed collateralized debt obligations		126		111		102		102		120		-4.8	%
State and municipal bonds		3,479		3,969		4,047		4,126		4,284		23.1	%
Hybrid and redeemable preferred securities		1,317		1,202		1,157		1,196		1,188		-9.8	%
VIEs' fixed maturity securities		593		700		700		702		705		18.9	%
Equity securities		144		137		139		126		154		6.9	%
Total AFS securities		71,657		75,428		76,272		77,082		80,050		11.7	%
Trading securities		2,625		2,726		2,675		2,650		2,649		0.9	%
Mortgage loans on real estate		6,871		6,893		6,942		6,938		6,804		-1.0	%
Real estate		150		136		137		113		116		-22.7	%
Policy loans		2,877		2,874		2,884		2,842		2,829		-1.7	%
Derivative investments		1,097		3,029		3,151		2,244		3,399		209.8	%
Other investments		1,001		1,105		1,069		1,043		1,041		4.0	%
Total investments		86,278		92,191		93,130		92,912		96,888		12.3	%
Cash and invested cash		2,912		4,833		4,510		3,516		5,257		80.5	%
DAC and VOBA		7,699		6,705		6,776		6,880		6,505		-15.5	%
Premiums and fees receivable		370		383		408		437		388		4.9	%
Accrued investment income		994		1,023		981		1,026		1,021		2.7	%
Reinsurance recoverables		6,556		6,659		6,526		6,534		6,601		0.7	%
Funds withheld reinsurance assets		885		881		874		866		863		-2.5	%
Goodwill		3,019		3,019		2,273		2,273		2,273		-24.7	%
Other assets		2,423		2,433		2,536		2,486		2,475		2.1	%
Separate account assets		88,846		78,195		83,477		91,088		88,839		0.0	%
Total assets	$	199,982	$	196,322	$	201,491	$	208,018	$	211,110		5.6	%

Page 4a

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

	As of
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Future contract benefits	$	17,874		$	19,988		$	19,813		$	18,784		$	19,930			11.5	%
Other contract holder funds		67,838			68,552			69,466			70,027			70,422			3.8	%
Short-term debt		251			550			300			300			300			19.5	%
Long-term debt by rating agency leverage definitions:
Operating (see note (1) on page 15 for details)		1,122			1,122			1,122			1,122			1,122			0.0	%
Financial		4,607			4,226			4,269			4,484			4,597			-0.2	%
Reinsurance related embedded derivatives		119			177			168			158			185			55.5	%
Funds withheld reinsurance liabilities		1,107			1,072			1,045			1,043			999			-9.8	%
Deferred gain on business sold through reinsurance		431			412			394			375			356			-17.4	%
Payables for collateral on investments		1,805			3,855			3,733			2,875			5,070			180.9	%
VIEs' liabilities		130			203			193			149			158			21.5	%
Other liabilities		3,294			3,983			4,273			4,352			4,950			50.3	%
Separate account liabilities		88,846			78,195			83,477			91,088			88,839			0.0	%
Total liabilities		187,424			182,335			188,253			194,757			196,928			5.1	%

Stockholders' Equity
Common stock		7,938			7,792			7,590			7,448			7,310			-7.9	%
Retained earnings		3,393			3,531			2,969			3,191			3,493			2.9	%
AOCI:
Unrealized gain (loss) on AFS securities		1,556			2,842			2,948			2,934			3,627			133.1	%
Unrealized OTTI on AFS securities		(111	)		(110	)		(110	)		(119	)		(117	)		-5.4	%
Unrealized gain (loss) on derivative instruments		(37	)		112			119			89			150		NM
Foreign currency translation adjustment		(3	)		3			-			(3	)		(4	)		-33.3	%
Funded status of employee benefit plans		(178	)		(183	)		(278	)		(279	)		(277	)		-55.6	%
Total AOCI		1,227			2,664			2,679			2,622			3,379			175.4	%
Total stockholders' equity		12,558			13,987			13,238			13,261			14,182			12.9	%
Total liabilities and stockholders' equity	$	199,982		$	196,322		$	201,491		$	208,018		$	211,110			5.6	%

Page 4b

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

	As of or For the Three Months Ended																		As of or For the Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
Income (Loss)
Income (loss) from operations	$	326		$	329		$	280		$	296		$	322			-1.2	%	$	648		$	617			-4.8	%
Net income		304			153			(539	)		245			324			6.6	%		617			569			-7.8	%

Earnings (Loss) Per Diluted Share
Income (loss) from operations	$	1.01		$	1.03		$	0.92		$	1.00		$	1.09			7.9	%	$	2.01		$	2.11			5.0	%
Net income (loss)		0.95			0.47			(1.81	)		0.83			1.10			15.8	%		1.92			1.94			1.0	%

Average Stockholders' Equity
Average equity, including AOCI	$	12,309		$	13,272		$	13,612		$	13,249		$	13,722			11.5	%	$	12,122		$	13,486			11.3	%
Average AOCI		1,050			1,945			2,671			2,650			3,000			185.7	%		956			2,825			195.5	%
Average equity, excluding AOCI	$	11,259		$	11,327		$	10,941		$	10,599		$	10,722			-4.8	%	$	11,166		$	10,661			-4.5	%

ROE
Income (loss) from operations		11.6	%		11.6	%		10.2	%		11.2	%		12.0	%					11.6	%		11.6	%
Net income (loss)		10.8	%		5.4	%		-19.7	%		9.3	%		12.1	%					11.1	%		10.7	%

Per Share
Dividends declared during the period	$	0.05		$	0.05		$	0.08		$	0.08		$	0.08			60.0	%	$	0.10		$	0.16			60.0	%
Book value, including AOCI		40.70			46.34			45.42			46.44			50.77			24.7	%		40.70			50.77			24.7	%
Book value, excluding AOCI		36.73			37.51			36.23			37.25			38.68			5.3	%		36.73			38.68			5.3	%

Shares
Repurchased during the period		5.1			6.7			10.4			6.0			6.5			25.7	%		7.6			12.5			64.4	%
Average for the period - diluted		319.9			312.0			303.4			295.9			290.0			-9.3	%		321.8			293.5			-8.8	%
End-of-period - assuming conversion of preferred		308.5			301.8			291.5			285.6			279.3			-9.5	%		308.5			279.3			-9.5	%
End-of-period - diluted		316.8			306.9			297.0			293.0			286.8			-9.5	%		316.8			286.8			-9.5	%

Cash Returned to Common Stockholders
Shares repurchased	$	150		$	150		$	200		$	150		$	150			0.0	%	$	225		$	300			33.3	%
Common dividends		16			15			15			23			23			43.8	%		31			46			48.4	%
Total cash returned to common stockholders	$	166		$	165		$	215		$	173		$	173			4.2	%	$	256		$	346			35.2	%

Page 5

Lincoln Financial Group
Income (Loss) from Operations, Average Equity and ROE By Segment
Unaudited (millions of dollars)

	For the Three Months Ended																		For the Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
Income (Loss) from Operations
Annuities	$	145		$	153		$	131		$	137		$	158			9.0	%	$	289		$	294			1.7	%
Retirement Plan Services		41			39			33			35			38			-7.3	%		90			72			-20.0	%
Life Insurance		136			154			138			142			138			1.5	%		279			281			0.7	%
Group Protection		26			27			20			16			27			3.8	%		50			43			-14.0	%
Other Operations		(22	)		(44	)		(42	)		(34	)		(39	)		-77.3	%		(60	)		(73	)		-21.7	%
Income (loss) from operations	$	326		$	329		$	280		$	296		$	322			-1.2	%	$	648		$	617			-4.8	%

Average Equity, Excluding AOCI
Segment equity, excluding goodwill:
Annuities	$	2,317		$	2,580		$	2,828		$	2,957		$	3,088			33.3	%	$	2,304		$	3,022			31.2	%
Retirement Plan Services		882			864			857			905			995			12.8	%		885			950			7.3	%
Life Insurance		5,662			5,660			5,628			5,710			5,864			3.6	%		5,612			5,787			3.1	%
Group Protection		878			875			889			906			927			5.6	%		883			916			3.7	%
Total segment equity, excluding goodwill		9,739			9,979			10,202			10,478			10,874			11.7	%		9,684			10,675			10.2	%
Other Operations and goodwill		1,520			1,348			739			121			(152	)	NM				1,482			(14	)	NM
Total average equity, excluding AOCI	$	11,259		$	11,327		$	10,941		$	10,599		$	10,722			-4.8	%	$	11,166		$	10,661			-4.5	%

ROE
Segment ROE, excluding goodwill:
Annuities		25.0	%		23.8	%		18.5	%		18.5	%		20.4	%					25.1	%		19.5	%
Retirement Plan Services		18.8	%		18.1	%		15.6	%		15.3	%		15.2	%					20.2	%		15.2	%
Life Insurance		9.6	%		10.9	%		9.8	%		10.0	%		9.4	%					9.9	%		9.7	%
Group Protection		11.7	%		12.3	%		9.2	%		7.1	%		11.6	%					11.3	%		9.4	%
Consolidated ROE - income (loss) from operations		11.6	%		11.6	%		10.2	%		11.2	%		12.0	%					11.6	%		11.6	%

Page 6

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

	For the Three Months Ended														For the Six Months Ended
	06/30/11			09/30/11		12/31/11		03/31/12		06/30/12		Change			06/30/11			06/30/12		Change
Annuities
Operating revenues	$	735		$	711	$	692	$	731	$	734		-0.1	%	$	1,468		$	1,465		-0.2	%
Average account values		88,432			85,584		84,708		89,537		89,890		1.6	%		87,445			89,714		2.6	%
Net flows		700			663		345		293		701		0.1	%		1,183			994		-16.0	%

Retirement Plan Services
Operating revenues	$	260		$	247	$	246	$	252	$	258		-0.8	%	$	523		$	510		-2.5	%
Average account values		40,481			38,911		38,634		40,834		41,315		2.1	%		39,956			41,008		2.6	%
Net flows		(178	)		329		219		212		194		209.0	%		(44	)		406	NM

Life Insurance
Operating revenues	$	1,229		$	1,176	$	1,187	$	1,232	$	1,237		0.7	%	$	2,376		$	2,469		3.9	%
Average account values		34,358			34,493		34,848		35,643		36,064		5.0	%		34,113			35,854		5.1	%
Average in-force face amount		568,704			572,585		577,137		579,897		581,015		2.2	%		566,771			580,456		2.4	%
Net flows		868			963		1,031		751		723		-16.7	%		1,689			1,474		-12.7	%

Group Protection
Operating revenues	$	501		$	479	$	481	$	504	$	540		7.8	%	$	979		$	1,043		6.5	%
Non-medical earned premiums		409			410		412		431		441		7.8	%		811			872		7.5	%

Consolidated
Operating revenues	$	2,839		$	2,735	$	2,715	$	2,824	$	2,882		1.5	%	$	5,578		$	5,707		2.3	%
Average account values		163,271			158,988		158,190		166,014		167,269		2.4	%		161,514			166,576		3.1	%
Net flows		1,390			1,955		1,595		1,256		1,618		16.4	%		2,828			2,874		1.6	%

Page 7

Lincoln Financial Group
Deposits, Net Flows and Account Balances By Segment
Unaudited (millions of dollars)

	As of or For the Three Months Ended														As of or For the Six Months Ended
	06/30/11			09/30/11		12/31/11		03/31/12		06/30/12		Change			06/30/11			06/30/12		Change
Deposits
Annuities	$	2,927		$	2,709	$	2,375	$	2,480	$	2,867		-2.0	%	$	5,566		$	5,347		-3.9	%
Retirement Plan Services		1,199			1,456		1,570		1,511		1,291		7.7	%		2,540			2,802		10.3	%
Life Insurance		1,274			1,343		1,506		1,159		1,137		-10.8	%		2,544			2,297		-9.7	%
Total deposits	$	5,400		$	5,508	$	5,451	$	5,150	$	5,295		-1.9	%	$	10,650		$	10,446		-1.9	%

Net Flows
Annuities	$	700		$	663	$	345	$	293	$	701		0.1	%	$	1,183		$	994		-16.0	%
Retirement Plan Services		(178	)		329		219		212		194		209.0	%		(44	)		406	NM
Life Insurance		868			963		1,031		751		723		-16.7	%		1,689			1,474		-12.7	%
Total net flows	$	1,390		$	1,955	$	1,595	$	1,256	$	1,618		16.4	%	$	2,828		$	2,874		1.6	%

Account Balances as of End-of-Period
Annuities	$	88,840		$	81,229	$	85,534	$	91,668	$	90,377		1.7	%	$	88,840		$	90,377		1.7	%
Retirement Plan Services		40,287			37,020		39,133		42,020		41,397		2.8	%		40,287			41,397		2.8	%
Life Insurance		34,567			34,419		35,278		36,008		36,121		4.5	%		34,567			36,121		4.5	%
Total account balances	$	163,694		$	152,668	$	159,945	$	169,696	$	167,895		2.6	%	$	163,694		$	167,895		2.6	%

Average Account Balances
Annuities	$	88,432		$	85,584	$	84,708	$	89,537	$	89,890		1.6	%	$	87,445		$	89,714		2.6	%
Retirement Plan Services		40,481			38,911		38,634		40,834		41,315		2.1	%		39,956			41,008		2.6	%
Life Insurance		34,358			34,493		34,848		35,643		36,064		5.0	%		34,113			35,854		5.1	%
Total average account balances	$	163,271		$	158,988	$	158,190	$	166,014	$	167,269		2.4	%	$	161,514		$	166,576		3.1	%

Page 8

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

	For the Three Months Ended													For the Six Months Ended
	06/30/11		09/30/11		12/31/11		03/31/12		06/30/12		Change			06/30/11		06/30/12		Change
Sales
Annuities:
Variable	$	2,356	$	2,155	$	2,028	$	2,185	$	2,422		2.8	%	$	4,540	$	4,607		1.5	%
Fixed		571		554		347		295		445		-22.1	%		1,026		740		-27.9	%
Total Annuities	$	2,927	$	2,709	$	2,375	$	2,480	$	2,867		-2.0	%	$	5,566	$	5,347		-3.9	%

Retirement Plan Services:
Small market	$	315	$	312	$	354	$	418	$	372		18.1	%	$	641	$	790		23.2	%
Mid - large market		704		969		1,053		920		740		5.1	%		1,535		1,660		8.1	%
Multi-Fund® and other variable		180		175		163		173		179		-0.6	%		364		352		-3.3	%
Total Retirement Plan Services	$	1,199	$	1,456	$	1,570	$	1,511	$	1,291		7.7	%	$	2,540	$	2,802		10.3	%

Life Insurance:
UL, excluding MoneyGuard®	$	83	$	74	$	75	$	47	$	51		-38.6	%	$	168	$	98		-41.7	%
MoneyGuard®		39		48		65		41		41		5.1	%		73		82		12.3	%
VUL		11		13		16		10		12		9.1	%		21		21		0.0	%
COLI and BOLI		10		8		57		11		11		10.0	%		27		22		-18.5	%
Term		14		12		15		13		13		-7	%		27		26		-3.7	%
Total Life Insurance	$	157	$	155	$	228	$	122	$	128		-18.5	%	$	316	$	249		-21.2	%

Group Protection:
Life	$	23	$	31	$	91	$	29	$	33		43.5	%	$	41	$	61		48.8	%
Disability		31		34		93		28		38		22.6	%		49		66		34.7	%
Dental		13		10		25		10		18		38.5	%		23		29		26.1	%
Total Group Protection	$	67	$	75	$	209	$	67	$	89		32.8	%	$	113	$	156		38.1	%

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 Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
Operating Revenues
Annuities	$	735		$	711		$	692		$	731		$	734			-0.1	%	$	1,468		$	1,465			-0.2	%
Retirement Plan Services		260			247			246			252			258			-0.8	%		523			510			-2.5	%
Life Insurance		1,229			1,176			1,187			1,232			1,237			0.7	%		2,376			2,469			3.9	%
Group Protection		501			479			481			504			540			7.8	%		979			1,043			6.5	%
Other Operations		114			122			109			105			113			-0.9	%		232			220			-5.2	%
Total	$	2,839		$	2,735		$	2,715		$	2,824		$	2,882			1.5	%	$	5,578		$	5,707			2.3	%

General and Administrative Expenses, Net of Amounts Capitalized
Annuities	$	99		$	91		$	100		$	107		$	97			-2.0	%	$	194		$	203			4.6	%
Retirement Plan Services		68			62			69			67			70			2.9	%		128			138			7.8	%
Life Insurance		99			100			110			108			102			3.0	%		197			210			6.6	%
Group Protection		47			48			55			52			53			12.8	%		90			106			17.8	%
Other Operations		9			20			15			23			23			155.6	%		36			45			25.0	%
Total	$	322		$	321		$	349		$	357		$	345			7.1	%	$	645		$	702			8.8	%

General and Administrative Expenses, Net of Amounts Capitalized, As a % of Operating Revenues
Annuities		13.4	%		12.8	%		14.4	%		14.6	%		13.2	%					13.2	%		13.9	%
Retirement Plan Services		26.0	%		25.0	%		28.2	%		26.6	%		27.3	%					24.4	%		27.0	%
Life Insurance		8.0	%		8.5	%		9.3	%		8.8	%		8.3	%					8.3	%		8.5	%
Group Protection		9.4	%		10.0	%		11.5	%		10.3	%		9.9	%					9.2	%		10.1	%
Other Operations		8.2	%		17.4	%		13.4	%		21.3	%		19.4	%					15.9	%		20.3	%
Total		11.3	%		11.7	%		12.9	%		12.6	%		12.0	%					11.6	%		12.3	%

Page 10

Lincoln Financial Group
Operating Commissions and Other Expenses
Unaudited (millions of dollars)

	For the Three Months Ended																		For the Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
Operating Commissions and Other Expenses Incurred
General and administrative expenses	$	366		$	368		$	409		$	399		$	394			7.7	%	$	731		$	793			8.5	%
Commissions		492			476			483			448			466			-5.3	%		975			915			-6.2	%
Media expenses		17			17			18			16			16			-5.9	%		34			32			-5.9	%
Taxes, licenses and fees		53			75			62			62			55			3.8	%		115			117			1.7	%
Interest and debt expense		72			71			70			68			68			-5.6	%		144			135			-6.3	%
Expenses associated with reserve financing and unrelated letters of credit		12			11			13			13			13			8.3	%		24			26			8.3	%
Total operating commissions and other expenses incurred		1,012			1,018			1,055			1,006			1,012			0.0	%		2,023			2,018			-0.2	%

Less Amounts Capitalized
General and administrative expenses		(44	)		(47	)		(60	)		(42	)		(49	)		-11.4	%		(86	)		(91	)		-5.8	%
Commissions		(297	)		(281	)		(290	)		(238	)		(260	)		12.5	%		(581	)		(498	)		14.3	%
Taxes, licenses and fees		(11	)		(13	)		(14	)		(10	)		(10	)		9.1	%		(23	)		(20	)		13.0	%
Total amounts capitalized		(352	)		(341	)		(364	)		(290	)		(319	)		9.4	%		(690	)		(609	)		11.7	%
Total expenses incurred, net of amounts capitalized, excluding amortization		660			677			691			716			693			5.0	%		1,333			1,409			5.7	%

Amortization
Amortization of DAC and VOBA		85			425			170			200			204			140.0	%		251			404			61.0	%
Amortization of intangibles		1			1			1			1			1			0.0	%		2			2			0.0	%
Total amortization		86			426			171			201			205			138.4	%		253			406			60.5	%
Total operating commissions and other expenses	$	746		$	1,103		$	862		$	917		$	898			20.4	%	$	1,586		$	1,815			14.4	%

Page 11

Lincoln Financial Group
Interest Rate Yields and Spreads By Segment
Unaudited

	For the Three Months Ended																		For the Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
Annuities
Investments on reserves, excluding alternative		5.19	%		5.08	%		4.98	%		4.93	%		4.86	%		(33	)		5.24	%		4.89	%		(35	)
Prepayment and make whole premiums		0.11	%		0.12	%		0.09	%		0.04	%		0.07	%		(4	)		0.18	%		0.06	%		(12	)
Alternative investments		0.00	%		0.00	%		0.00	%		0.00	%		0.01	%		1			0.00	%		0.01	%		1
Net investment income yield on reserves		5.30	%		5.20	%		5.07	%		4.97	%		4.94	%		(36	)		5.42	%		4.96	%		(46	)
Interest rate credited to contract holders		3.38	%		3.33	%		3.26	%		3.15	%		3.03	%		(35	)		3.34	%		3.09	%		(25	)
Interest rate spread		1.92	%		1.87	%		1.81	%		1.82	%		1.91	%		(1	)		2.08	%		1.87	%		(21	)

Retirement Plan Services
Investments on reserves, excluding alternative		5.55	%		5.53	%		5.40	%		5.34	%		5.28	%		(27	)		5.58	%		5.30	%		(28	)
Prepayment and make whole premiums		0.23	%		0.04	%		0.05	%		0.04	%		0.02	%		(21	)		0.29	%		0.03	%		(26	)
Alternative investments		0.01	%		0.00	%		0.01	%		0.01	%		0.02	%		1			0.02	%		0.02	%		-
Net investment income yield on reserves		5.79	%		5.57	%		5.46	%		5.39	%		5.32	%		(47	)		5.89	%		5.35	%		(54	)
Interest rate credited to contract holders		3.34	%		3.31	%		3.28	%		3.22	%		3.22	%		(12	)		3.35	%		3.22	%		(13	)
Interest rate spread		2.45	%		2.26	%		2.18	%		2.17	%		2.10	%		(35	)		2.54	%		2.13	%		(41	)

Life Insurance
Attributable to interest-sensitive products:
Investments on reserves, excluding alternative		5.82	%		5.74	%		5.71	%		5.77	%		5.75	%		(7	)		5.86	%		5.75	%		(11	)
Prepayment and make whole premiums		0.14	%		0.06	%		0.03	%		0.02	%		0.07	%		(7	)		0.09	%		0.05	%		(4	)
Alternative investments		0.29	%		0.16	%		0.00	%		0.17	%		0.15	%		(14	)		0.31	%		0.16	%		(15	)
Net investment income yield on reserves		6.25	%		5.96	%		5.74	%		5.96	%		5.97	%		(28	)		6.26	%		5.96	%		(30	)
Interest rate credited to contract holders		4.09	%		4.10	%		4.05	%		3.95	%		3.92	%		(17	)		4.09	%		3.94	%		(15	)
Interest rate spread		2.16	%		1.86	%		1.69	%		2.01	%		2.05	%		(11	)		2.17	%		2.02	%		(15	)

Attributable to traditional products:
Investments on reserves, excluding alternative		6.00	%		5.90	%		5.81	%		5.73	%		5.79	%		(21	)		5.95	%		5.76	%		(19	)
Prepayment and make whole premiums		0.00	%		0.03	%		0.01	%		0.00	%		0.04	%		4			0.05	%		0.02	%		(3	)
Alternative investments		0.00	%		0.00	%		0.01	%		0.01	%		0.02	%		2			0.01	%		0.01	%		-
Net investment income yield on reserves		6.00	%		5.93	%		5.83	%		5.74	%		5.85	%		(15	)		6.01	%		5.79	%		(22	)

Page 12

Lincoln Financial Group
Select Investment Data
Unaudited (millions of dollars)

	As of 06/30/11					As of 12/31/11					As of 06/30/12
	Amount		%			Amount		%			Amount		%
AFS and Trading Securities, at Fair Value
AFS securities:
Corporate bonds	$	54,830		73.8	%	$	59,261		75.1	%	$	63,914		77.3	%
U.S. government bonds		240		0.3	%		494		0.6	%		517		0.6	%
Foreign government bonds		594		0.8	%		733		0.9	%		664		0.8	%
Mortgage-backed securities		10,334		13.9	%		9,639		12.2	%		8,504		10.3	%
Asset-backed collateralized debt obligations		126		0.2	%		102		0.1	%		120		0.1	%
State and municipal bonds		3,479		4.7	%		4,047		5.1	%		4,284		5.2	%
Hybrid and redeemable preferred securities		1,317		1.8	%		1,157		1.5	%		1,188		1.4	%
VIEs' fixed maturity securities		593		0.8	%		700		0.9	%		705		0.9	%
Equity securities		144		0.2	%		139		0.2	%		154		0.2	%
Total AFS securities		71,657		96.5	%		76,272		96.6	%		80,050		96.8	%
Trading securities		2,625		3.5	%		2,675		3.4	%		2,649		3.2	%
Total AFS and trading securities	$	74,282		100.0	%	$	78,947		100.0	%	$	82,699		100.0	%

AFS and Trading Securities, at Amortized Cost
Fixed maturity securities	$	70,282		99.8	%	$	71,960		99.8	%	$	74,325		99.8	%
Equity securities		122		0.2	%		137		0.2	%		145		0.2	%
Total AFS and trading securities	$	70,404		100.0	%	$	72,097		100.0	%	$	74,470		100.0	%

% of Fixed Maturity AFS Securities, at Amortized Cost
Investment grade				94.5	%				94.4	%				94.7	%
Below investment grade				5.5	%				5.6	%				5.3	%

	For the Three Months Ended																		For the Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
Net Investment Income	$	1,181		$	1,151		$	1,129		$	1,166		$	1,197			1.4	%	$	2,372		$	2,362			-0.4	%

Average Invested Assets, at Amortized Cost		81,102			82,254			83,211			83,883			84,958			4.8	%		80,549			84,420			4.8	%

Net Investment Income Yield		5.82	%		5.60	%		5.43	%		5.56	%		5.64	%		(18	)		5.89	%		5.60	%		(29	)

Page 13

Lincoln Financial Group
Realized Gain (Loss) and Benefit Ratio Unlocking, After-DAC
Unaudited (millions of dollars)

	For the Three Months Ended																		For the Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
Realized Gain (Loss), Pre-Tax
Total operating realized gain (loss)	$	24		$	23		$	25		$	27		$	25			4.2	%	$	46		$	52			13.0	%
Total excluded realized gain (loss)		(33	)		(186	)		(149	)		(112	)		18			154.5	%		(53	)		(95	)		-79.2	%
Total realized gain (loss), pre-tax	$	(9	)	$	(163	)	$	(124	)	$	(85	)	$	43		NM			$	(7	)	$	(43	)	NM

Realized Gain (Loss) Net of Benefit Ratio Unlocking, After-Tax
Realized gain (loss) related to investments	$	(22	)	$	(98	)	$	(28	)	$	6		$	(45	)	NM			$	(25	)	$	(39	)		-56.0	%
Variable annuity net derivative results:
Hedge program performance, including for GLB reserves hedged		(11	)		(169	)		5			19			(38	)	NM				(29	)		(20	)		31.0	%
GLB non-performance risk component		11			106			(49	)		(85	)		86		NM				21			2			-90.5	%
Total variable annuity net derivative results		-			(63	)		(44	)		(66	)		48		NM				(8	)		(18	)	NM
Indexed annuity forward-starting option		-			(2	)		-			10			(1	)	NM				2			9		NM
Excluded realized gain (loss) net of benefit ratio unlocking, after-tax	$	(22	)	$	(163	)	$	(72	)	$	(50	)	$	2			109.1	%	$	(31	)	$	(48	)		-54.8	%

Components of Realized Gain (Loss) Related to Investments, After-Tax
OTTI	$	(20	)	$	(17	)	$	(16	)	$	(31	)	$	(21	)		-6.5	%	$	(47	)	$	(52	)		-11.1	%
Other realized gain (loss) related to certain investments		(1	)		(12	)		(21	)		(1	)		(12	)	NM				16			(12	)	NM
Gain (loss) on the mark-to-market on certain instruments		(1	)		(69	)		9			38			(12	)	NM				6			25		NM
Total realized gain (loss) related to investments, after-tax	$	(22	)	$	(98	)	$	(28	)	$	6		$	(45	)	NM			$	(25	)	$	(39	)		-56.0	%

Page 14

Lincoln Financial Group
Select Liquidity and Rating Agency Data
Unaudited (millions of dollars)

	As of
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change
Leverage Ratio
Short-term debt	$	251		$	550		$	300		$	300		$	300			19.5	%
Long-term debt		5,729			5,348			5,391			5,606			5,719			-0.2	%
Total debt		5,980			5,898			5,691			5,906			6,019			0.7	%
Less:
Long-term operating debt (1)		1,122			1,122			1,122			1,122			1,122			0.0	%
75% of capital securities		1,114			908			908			908			908			-18.5	%
Carrying value of fair value hedges		84			278			320			234			330			294.6	%
Total numerator	$	3,660		$	3,591		$	3,341		$	3,642		$	3,659			0.0	%

Stockholders' equity, excluding AOCI	$	11,331		$	11,323		$	10,559		$	10,639		$	10,803			-4.7	%
Total debt		5,980			5,898			5,691			5,906			6,019			0.7	%
Total denominator	$	17,311		$	17,221		$	16,250		$	16,545		$	16,822			-2.8	%

Leverage ratio		21.1	%		20.8	%		20.6	%		22.0	%		21.7	%

Holding Company Available Cash	$	948		$	771		$	589		$	876		$	838			-11.6	%

	Ratings as of August 1, 2012
				Standard
	A.M. Best	Fitch	Moody's	& Poor's
Senior Debt Ratings	a-	BBB+	Baa2	A-

Financial Strength Ratings
Lincoln National Life Insurance Company	A+	A+	A2	AA-
First Penn-Pacific Life Insurance Company	A+	A+	A2	A-
Lincoln Life & Annuity Company of New York	A+	A+	A2	AA-

(1)

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 and the senior note issued in September 2008 by our primary insurance subsidiary.

Page 15

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 Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
Income (Loss) from Operations
Operating revenues:
Insurance premiums	$	22		$	15		$	14		$	17		$	18			-18.2	%	$	45		$	35			-22.2	%
Insurance fees		321			317			299			325			323			0.6	%		631			648			2.7	%
Net investment income		278			271			270			272			279			0.4	%		566			551			-2.7	%
Operating realized gain (loss)		23			23			25			27			25			8.7	%		46			53			15.2	%
Other revenues and fees		91			85			84			90			89			-2.2	%		180			178			-1.1	%
Total operating revenues		735			711			692			731			734			-0.1	%		1,468			1,465			-0.2	%
Operating expenses:
Interest credited		178			177			169			171			163			-8.4	%		352			333			-5.4	%
Benefits		43			87			47			45			49			14.0	%		78			95			21.8	%
Commissions incurred		193			182			173			183			202			4.7	%		370			385			4.1	%
Other expenses incurred		190			177			182			196			187			-1.6	%		377			383			1.6	%
Amounts capitalized		(141	)		(137	)		(123	)		(124	)		(149	)		-5.7	%		(268	)		(273	)		-1.9	%
Amortization		93			65			90			98			86			-7.5	%		196			184			-6.1	%
Total operating expenses		556			551			538			569			538			-3.2	%		1,105			1,107			0.2	%
Income (loss) from operations before taxes		179			160			154			162			196			9.5	%		363			358			-1.4	%
Federal income tax expense (benefit)		34			7			23			25			38			11.8	%		74			64			-13.5	%
Income (loss) from operations	$	145		$	153		$	131		$	137		$	158			9.0	%	$	289		$	294			1.7	%

Effective Federal Income Tax Rate		19.0	%		4.2	%		15.2	%		15.4	%		19.6	%					20.4	%		17.7	%

Average Equity, Excluding Goodwill and AOCI	$	2,317		$	2,580		$	2,828		$	2,957		$	3,088			33.3	%	$	2,304		$	3,022			31.2	%

ROE, Excluding Goodwill		25.0	%		23.8	%		18.5	%		18.5	%		20.4	%					25.1	%		19.5	%

Return on Average Account Values		65			72			62			61			70			5			66			66			-

Account Values
Separate account values:
Average	$	68,262		$	65,169		$	64,173		$	69,003		$	69,222			1.4	%	$	67,365		$	69,113			2.6	%
End-of-period		68,551			60,774			65,010			71,059			69,615			1.6	%		68,551			69,615			1.6	%
General account values:
Average		20,170			20,415			20,535			20,534			20,668			2.5	%		20,080			20,601			2.6	%
End-of-period		20,289			20,455			20,524			20,609			20,762			2.3	%		20,289			20,762			2.3	%

Page 16

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 Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
Income (Loss) from Operations
Operating revenues:
Insurance fees	$	55		$	51		$	49		$	52		$	53			-3.6	%	$	110		$	105			-4.5	%
Net investment income		200			193			194			197			202			1.0	%		405			399			-1.5	%
Other revenues and fees		5			3			3			3			3			-40.0	%		8			6			-25.0	%
Total operating revenues		260			247			246			252			258			-0.8	%		523			510			-2.5	%
Operating expenses:
Interest credited		109			109			112			111			112			2.8	%		217			223			2.8	%
Benefits		-			2			-			-			-		NM				-			-		NM
Commissions incurred		17			16			17			18			17			0.0	%		34			35			2.9	%
Other expenses incurred		75			68			74			76			78			4.0	%		142			155			9.2	%
Amounts capitalized		(9	)		(8	)		(9	)		(10	)		(9	)		0.0	%		(17	)		(19	)		-11.8	%
Amortization		10			7			7			10			10			0.0	%		19			19			0.0	%
Total operating expenses		202			194			201			205			208			3.0	%		395			413			4.6	%
Income (loss) from operations before taxes		58			53			45			47			50			-13.8	%		128			97			-24.2	%
Federal income tax expense (benefit)		17			14			12			12			12			-29.4	%		38			25			-34.2	%
Income (loss) from operations	$	41		$	39		$	33		$	35		$	38			-7.3	%	$	90		$	72			-20.0	%

Effective Federal Income Tax Rate		28.9	%		26.9	%		26.4	%		26.1	%		24.0	%					29.8	%		25.0	%

Average Equity, Excluding Goodwill and AOCI	$	882		$	864		$	857		$	905		$	995			12.8	%	$	885		$	950			7.3	%

ROE, Excluding Goodwill		18.8	%		18.1	%		15.6	%		15.3	%		15.2	%					20.2	%		15.2	%

Return on Average Account Values		41			40			35			34			37			(4	)		45			35			(10	)

Account Values
Separate account values:
Average	$	14,284		$	13,217		$	12,783		$	13,589		$	13,373			-6.4	%	$	14,232		$	13,481			-5.3	%
End-of-period		14,254			12,122			12,867			13,959			13,338			-6.4	%		14,254			13,338			-6.4	%
Mutual fund account values:
Average		13,197			12,450			12,327			13,522			14,039			6.4	%		12,791			13,715			7.2	%
End-of-period		13,008			11,503			12,636			14,241			14,056			8.1	%		13,008			14,056			8.1	%
General account values:
Average		13,000			13,244			13,524			13,723			13,903			6.9	%		12,933			13,812			6.8	%
End-of-period		13,025			13,395			13,630			13,820			14,003			7.5	%		13,025			14,003			7.5	%

Page 17

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 Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
Income (Loss) from Operations
Operating revenues:
Insurance premiums	$	112		$	104		$	117		$	109		$	114			1.8	%	$	220		$	222			0.9	%
Insurance fees		523			498			505			529			511			-2.3	%		975			1,040			6.7	%
Net investment income		588			569			558			588			606			3.1	%		1,167			1,195			2.4	%
Other revenues and fees		6			5			7			6			6			0.0	%		14			12			-14.3	%
Total operating revenues		1,229			1,176			1,187			1,232			1,237			0.7	%		2,376			2,469			3.9	%
Operating expenses:
Interest credited		307			312			314			311			311			1.3	%		610			622			2.0	%
Benefits		609			152			460			475			477			-21.7	%		1,056			952			-9.8	%
Commissions incurred		166			161			179			130			126			-24.1	%		339			256			-24.5	%
Other expenses incurred		164			171			180			174			168			2.4	%		327			342			4.6	%
Amounts capitalized		(192	)		(183	)		(211	)		(145	)		(143	)		25.5	%		(386	)		(289	)		25.1	%
Amortization		(27	)		344			61			80			97		NM				18			177		NM
Total operating expenses		1,027			957			983			1,025			1,036			0.9	%		1,964			2,060			4.9	%
Income (loss) from operations before taxes		202			219			204			207			201			-0.5	%		412			409			-0.7	%
Federal income tax expense (benefit)		66			65			66			65			63			-4.5	%		133			128			-3.8	%
Income (loss) from operations	$	136		$	154		$	138		$	142		$	138			1.5	%	$	279		$	281			0.7	%

Effective Federal Income Tax Rate		32.3	%		29.8	%		32.3	%		31.5	%		31.3	%					32.3	%		31.4	%

Average Equity, Excluding Goodwill and AOCI	$	5,662		$	5,660		$	5,628		$	5,710		$	5,864			3.6	%	$	5,612		$	5,787			3.1	%

ROE, Excluding Goodwill		9.6	%		10.9	%		9.8	%		10.0	%		9.4	%					9.9	%		9.7	%

Average Account Values	$	34,358		$	34,493		$	34,848		$	35,643		$	36,064			5.0	%	$	34,113		$	35,854			5.1	%

In-Force Face Amount
UL and other	$	302,205		$	304,475		$	307,900		$	307,957		$	308,763			2.2	%	$	302,205		$	308,763			2.2	%
Term insurance		268,520			269,969			271,931			272,006			273,305			1.8	%		268,520			273,305			1.8	%
Total in-force face amount	$	570,725		$	574,444		$	579,831		$	579,963		$	582,068			2.0	%	$	570,725		$	582,068			2.0	%

Page 18

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

	For the Three Months Ended																		For the Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
Income (Loss) from Operations
Operating revenues:
Insurance premiums	$	460		$	440		$	442		$	463		$	495			7.6	%	$	897		$	958			6.8	%
Net investment income		39			37			37			38			42			7.7	%		78			81			3.8	%
Other revenues and fees		2			2			2			3			3			50.0	%		4			4			0.0	%
Total operating revenues		501			479			481			504			540			7.8	%		979			1,043			6.5	%
Operating expenses:
Interest credited		1			1			1			1			1			0.0	%		2			2			0.0	%
Benefits		345			319			323			350			368			6.7	%		672			718			6.8	%
Commissions incurred		49			50			51			54			53			8.2	%		100			107			7.0	%
Other expenses incurred		67			72			85			73			82			22.4	%		128			155			21.1	%
Amounts capitalized		(10	)		(13	)		(21	)		(11	)		(17	)		-70.0	%		(19	)		(28	)		-47.4	%
Amortization		9			9			11			12			11			22.2	%		19			23			21.1	%
Total operating expenses		461			438			450			479			498			8.0	%		902			977			8.3	%
Income (loss) from operations before taxes		40			41			31			25			42			5.0	%		77			66			-14.3	%
Federal income tax expense (benefit)		14			14			11			9			15			7.1	%		27			23			-14.8	%
Income (loss) from operations	$	26		$	27		$	20		$	16		$	27			3.8	%	$	50		$	43			-14.0	%

Effective Federal Income Tax Rate		35.0	%		35.0	%		35.0	%		35.0	%		35.6	%					35.0	%		35.4	%

Average Equity, Excluding Goodwill and AOCI	$	878		$	875		$	889		$	906		$	927			5.6	%	$	883		$	916			3.7	%

ROE, Excluding Goodwill		11.7	%		12.3	%		9.2	%		7.1	%		11.6	%					11.3	%		9.4	%

Loss Ratios by Product Line
Life		76.1	%		72.1	%		75.1	%		78.2	%		75.0	%					76.0	%		76.6	%
Disability		69.4	%		70.4	%		69.6	%		70.1	%		69.6	%					69.7	%		69.8	%
Dental		79.9	%		76.2	%		71.6	%		82.1	%		76.5	%					81.8	%		79.2	%
Total non-medical		73.4	%		71.8	%		72.2	%		74.9	%		72.7	%					73.7	%		73.8	%
Medical		89.4	%		86.9	%		88.6	%		87.6	%		89.7	%					88.1	%		88.9	%

Page 19

Lincoln Financial Group
Other Operations and Discontinued Operations - Select Earnings Data
Unaudited (millions of dollars)

	For the Three Months Ended																		For the Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
Other Operations
Operating revenues:
Insurance premiums	$	-		$	1		$	-		$	-		$	3		NM			$	-		$	4		NM
Net investment income		76			80			71			70			68			-10.5	%		156			137			-12.2	%
Amortization of deferred gain on business sold through reinsurance		18			18			18			18			18			0.0	%		36			36			0.0	%
Media revenues		19			20			21			17			21			10.5	%		36			38			5.6	%
Other revenues and fees		1			3			(1	)		-			3			200.0	%		4			5			25.0	%
Total operating revenues		114			122			109			105			113			-0.9	%		232			220			-5.2	%
Operating expenses:
Interest credited		29			27			28			31			30			3.4	%		58			61			5.2	%
Benefits		28			34			31			28			35			25.0	%		62			63			1.6	%
Media expenses		17			17			18			16			16			-5.9	%		34			32			-5.9	%
Commissions and other expenses		3			34			28			19			15		NM				29			36			24.1	%
Interest and debt expenses		72			71			70			68			68			-5.6	%		144			135			-6.3	%
Total operating expenses		149			183			175			162			164			10.1	%		327			327			0.0	%
Income (loss) from operations before taxes		(35	)		(61	)		(66	)		(57	)		(51	)		-45.7	%		(95	)		(107	)		-12.6	%
Federal income tax expense (benefit)		(13	)		(17	)		(24	)		(23	)		(12	)		7.7	%		(35	)		(34	)		2.9	%
Income (loss) from operations	$	(22	)	$	(44	)	$	(42	)	$	(34	)	$	(39	)		-77.3	%	$	(60	)	$	(73	)		-21.7	%



Discontinued Operations
Gain (loss) on disposal before taxes	$	-		$	(3	)	$	-		$	(1	)	$	-		NM			$	-		$	(1	)	NM
Federal income tax expense (benefit)		-			5			-			-			-		NM				-			-		NM
Gain (loss) on disposal	$	-		$	(8	)	$	-		$	(1	)	$	-		NM			$	-		$	(1	)	NM

Page 20

Lincoln Financial Group
Consolidated - DAC, VOBA, DSI and DFEL Roll Forwards
Unaudited (millions of dollars)

	For the Three Months Ended																		For the Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
DAC and VOBA
Balance as of beginning-of-period	$	7,695		$	7,699		$	6,705		$	6,776		$	6,880			-11	%	$	7,414		$	6,776			-8.6	%
Business sold through reinsurance		-			2			11			-			-		NM				-			-		NM
Deferrals		352			341			364			290			319			-9	%		690			609			-11.7	%
Operating amortization		(85	)		(425	)		(170	)		(200	)		(204	)	NM				(251	)		(404	)		-61.0	%
Deferrals, net of operating amortization		267			(84	)		194			90			115			-57	%		439			205			-53.3	%
Amortization associated with benefit ratio unlocking		-			7			(5	)		(5	)		2		NM				(1	)		(3	)	NM
Adjustment related to realized (gains) losses		(18	)		3			12			19			(34	)		-89	%		(40	)		(16	)		60.0	%
Adjustment related to unrealized (gains) losses		(245	)		(922	)		(141	)		-			(458	)		-87	%		(113	)		(457	)	NM
Balance as of end-of-period	$	7,699		$	6,705		$	6,776		$	6,880		$	6,505			-16	%	$	7,699		$	6,505			-15.5	%

DSI
Balance as of beginning-of-period	$	286		$	276		$	268		$	271		$	268			-6	%	$	286		$	271			-5.2	%
Deferrals		9			11			10			9			10			11	%		18			19			5.6	%
Operating amortization		(11	)		(10	)		(5	)		(12	)		(10	)		9	%		(24	)		(22	)		8.3	%
Deferrals, net of operating amortization		(2	)		1			5			(3	)		-			100	%		(6	)		(3	)		50.0	%
Amortization associated with benefit ratio unlocking		-			1			(1	)		(1	)		-		NM				-			-		NM
Adjustment related to realized (gains) losses		(1	)		(1	)		2			2			(4	)	NM				(2	)		(2	)		0.0	%
Adjustment related to unrealized (gains) losses		(7	)		(9	)		(3	)		(1	)		(4	)		43	%		(2	)		(6	)	NM
Balance as of end-of-period	$	276		$	268		$	271		$	268		$	260			-6	%	$	276		$	260			-5.8	%

DFEL
Balance as of beginning-of-period	$	1,640		$	1,694		$	1,338		$	1,369		$	1,404			-14	%	$	1,502		$	1,369			-8.9	%
Deferrals		134			134			132			90			88			-34	%		277			178			-35.7	%
Operating amortization		(54	)		(40	)		(36	)		(50	)		(42	)		22	%		(59	)		(92	)		-55.9	%
Deferrals, net of operating amortization		80			94			96			40			46			-43	%		218			86			-60.6	%
Amortization associated with benefit ratio unlocking		-			2			(1	)		(1	)		-		NM				-			(1	)	NM
Adjustment related to realized (gains) losses		(2	)		(4	)		1			5			(6	)	NM				(6	)		(1	)		83.3	%
Adjustment related to unrealized (gains) losses		(24	)		(448	)		(65	)		(9	)		(183	)	NM				(20	)		(192	)	NM
Balance as of end-of-period	$	1,694		$	1,338		$	1,369		$	1,404		$	1,261			-26	%	$	1,694		$	1,261			-25.6	%

Page 21

Lincoln Financial Group
Annuities - DAC, VOBA, DSI and DFEL Roll Forwards
Unaudited (millions of dollars)

	For the Three Months Ended																		For the Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
DAC and VOBA
Balance as of beginning-of-period	$	1,949		$	1,913		$	1,877		$	1,912		$	1,965			0.8	%	$	1,882		$	1,912			1.6	%
Deferrals		141			137			123			125			149			5.7	%		268			273			1.9	%
Operating amortization		(93	)		(65	)		(90	)		(98	)		(86	)		7.5	%		(196	)		(184	)		6.1	%
Deferrals, net of operating amortization		48			72			33			27			63			31.3	%		72			89			23.6	%
Amortization associated with benefit ratio unlocking		-			7			(5	)		(4	)		2		NM				(1	)		(3	)	NM
Adjustment related to realized (gains) losses		(8	)		1			13			17			(34	)	NM				(15	)		(16	)		-6.7	%
Adjustment related to unrealized (gains) losses		(76	)		(116	)		(6	)		13			(56	)		26.3	%		(25	)		(42	)		-68.0	%
Balance as of end-of-period	$	1,913		$	1,877		$	1,912		$	1,965		$	1,940			1.4	%	$	1,913		$	1,940			1.4	%

DSI
Balance as of beginning-of-period	$	284		$	274		$	266		$	269		$	267			-6.0	%	$	284		$	269			-5.3	%
Deferrals		9			10			10			9			10			11.1	%		18			18			0.0	%
Operating amortization		(11	)		(11	)		(5	)		(12	)		(10	)		9.1	%		(24	)		(22	)		8.3	%
Deferrals, net of operating amortization		(2	)		(1	)		5			(3	)		-			100.0	%		(6	)		(4	)		33.3	%
Amortization associated with benefit ratio unlocking		-			1			(1	)		(1	)		-		NM				-			-		NM
Adjustment related to realized (gains) losses		(1	)		(1	)		1			3			(4	)	NM				(2	)		(1	)		50.0	%
Adjustment related to unrealized (gains) losses		(7	)		(7	)		(2	)		(1	)		(5	)		28.6	%		(2	)		(6	)	NM
Balance as of end-of-period	$	274		$	266		$	269		$	267		$	258			-5.8	%	$	274		$	258			-5.8	%

DFEL
Balance as of beginning-of-period	$	234		$	247		$	249		$	263		$	267			14.1	%	$	222		$	263			18.5	%
Deferrals		19			16			10			6			7			-63.2	%		35			13			-62.9	%
Operating amortization		(5	)		(9	)		4			(5	)		(3	)		40.0	%		(10	)		(8	)		20.0	%
Deferrals, net of operating amortization		14			7			14			1			4			-71.4	%		25			5			-80.0	%
Amortization associated with benefit ratio unlocking		-			2			(1	)		(1	)		-		NM				-			(1	)	NM
Adjustment related to realized (gains) losses		(1	)		(5	)		2			5			(6	)	NM				(3	)		(1	)		66.7	%
Adjustment related to unrealized (gains) losses		-			(2	)		(1	)		(1	)		-		NM				3			(1	)	NM
Balance as of end-of-period	$	247		$	249		$	263		$	267		$	265			7.3	%	$	247		$	265			7.3	%

Page 22

Lincoln Financial Group
Retirement Plan Services, Life Insurance and Group Protection - DAC, VOBA and DFEL Roll Forwards
Unaudited (millions of dollars)

	For the Three Months Ended																		For the Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
DAC and VOBA - Retirement Plan Services
Balance as of beginning-of-period	$	230		$	217		$	189		$	183		$	165			-28.3	%	$	195		$	183			-6.2	%
Deferrals		9			8			9			10			9			0.0	%		17			19			11.8	%
Operating amortization		(10	)		(7	)		(7	)		(10	)		(10	)		0.0	%		(19	)		(19	)		0.0	%
Deferrals, net of operating amortization		(1	)		1			2			-			(1	)		0.0	%		(2	)		-			100.0	%
Adjustment related to unrealized (gains) losses		(12	)		(29	)		(8	)		(18	)		(19	)		-58.3	%		24			(38	)	NM
Balance as of end-of-period	$	217		$	189		$	183		$	165		$	145			-33.2	%	$	217		$	145			-33.2	%

DAC and VOBA - Life Insurance
Balance as of beginning-of-period	$	5,365		$	5,417		$	4,484		$	4,516		$	4,586			-14.5	%	$	5,186		$	4,516			-12.9	%
Business sold through reinsurance		-			2			11			-			-		NM				-			-		NM
Deferrals		192			183			211			145			143			-25.5	%		386			289			-25.1	%
Operating amortization		27			(344	)		(61	)		(80	)		(97	)	NM				(18	)		(177	)	NM
Deferrals, net of operating amortization		219			(161	)		150			65			46			-79.0	%		368			112			-69.6	%
Adjustment related to realized (gains) losses		(9	)		3			(1	)		1			(1	)		88.9	%		(24	)		1			104.2	%
Adjustment related to unrealized (gains) losses		(158	)		(777	)		(128	)		4			(380	)	NM				(113	)		(378	)	NM
Balance as of end-of-period	$	5,417		$	4,484		$	4,516		$	4,586		$	4,251			-21.5	%	$	5,417		$	4,251			-21.5	%

DFEL - Life Insurance
Balance as of beginning-of-period	$	1,406		$	1,447		$	1,088		$	1,106		$	1,136			-19.2	%	$	1,280		$	1,106			-13.6	%
Deferrals		116			119			122			83			82			-29.3	%		242			165			-31.8	%
Operating amortization		(49	)		(31	)		(39	)		(45	)		(39	)		20.4	%		(49	)		(84	)		-71.4	%
Deferrals, net of operating amortization		67			88			83			38			43			-35.8	%		193			81			-58.0	%
Adjustment related to realized (gains) losses		(1	)		1			-			-			-			100.0	%		(3	)		-			100.0	%
Adjustment related to unrealized (gains) losses		(25	)		(448	)		(65	)		(8	)		(182	)	NM				(23	)		(190	)	NM
Balance as of end-of-period	$	1,447		$	1,088		$	1,106		$	1,136		$	997			-31.1	%	$	1,447		$	997			-31.1	%

DAC and VOBA - Group Protection
Balance as of beginning-of-period	$	150		$	151		$	155		$	165		$	164			9.3	%	$	151		$	165			9.3	%
Deferrals		10			13			21			11			17			70.0	%		19			28			47.4	%
Operating amortization		(9	)		(9	)		(11	)		(12	)		(11	)		-22.2	%		(19	)		(23	)		-21.1	%
Deferrals, net of operating amortization		1			4			10			(1	)		6		NM				-			5		NM
Balance as of end-of-period	$	151		$	155		$	165		$	164		$	170			12.6	%	$	151		$	170			12.6	%

Page 23

Lincoln Financial Group
Annuities - Account Value Roll Forwards
Unaudited (millions of dollars)

	For the Three Months Ended																		For the Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
Fixed Annuities
Balance as of beginning-of-period	$	17,643		$	17,938		$	18,009		$	18,106		$	18,186			3.1	%	$	17,420		$	18,106			3.9	%
Gross deposits		571			554			347			295			445			-22.1	%		1,026			740			-27.9	%
Withdrawals and deaths		(437	)		(508	)		(475	)		(465	)		(477	)		-9.2	%		(861	)		(942	)		-9.4	%
Net flows		134			46			(128	)		(170	)		(32	)	NM				165			(202	)	NM
Reinvested interest credited		153			15			215			241			110			-28.1	%		335			351			4.8	%
Sales inducements deferred		8			10			10			9			9			12.5	%		18			18			0.0	%
Balance as of end-of-period, gross		17,938			18,009			18,106			18,186			18,273			1.9	%		17,938			18,273			1.9	%
Reinsurance ceded		(935	)		(920	)		(901	)		(883	)		(871	)		6.8	%		(935	)		(871	)		6.8	%
Balance as of end-of-period, net	$	17,003		$	17,089		$	17,205		$	17,303		$	17,402			2.3	%	$	17,003		$	17,402			2.3	%

Variable Annuities
Balance as of beginning-of-period	$	71,091		$	71,837		$	64,140		$	68,330		$	74,366			4.6	%	$	68,390		$	68,330			-0.1	%
Gross deposits		2,356			2,155			2,028			2,185			2,422			2.8	%		4,540			4,607			1.5	%
Withdrawals and deaths		(1,790	)		(1,538	)		(1,555	)		(1,722	)		(1,689	)		5.6	%		(3,522	)		(3,411	)		3.2	%
Net flows		566			617			473			463			733			29.5	%		1,018			1,196			17.5	%
Change in market value and reinvestment		180			(8,314	)		3,717			5,573			(2,123	)	NM				2,429			3,450			42.0	%
Balance as of end-of-period, gross		71,837			64,140			68,330			74,366			72,976			1.6	%		71,837			72,976			1.6	%
Reinsurance ceded		-			-			(1	)		(1	)		(1	)	NM				-			(1	)	NM
Balance as of End-of-Period	$	71,837		$	64,140		$	68,329		$	74,365		$	72,975			1.6	%	$	71,837		$	72,975			1.6	%

Total		0			0			0			0			0
Balance as of beginning-of-period	$	88,734		$	89,775		$	82,149		$	86,436		$	92,552			4.3	%	$	85,810		$	86,436			0.7	%
Gross deposits		2,927			2,709			2,375			2,480			2,867			-2.0	%		5,566			5,347			-3.9	%
Withdrawals and deaths		(2,227	)		(2,046	)		(2,030	)		(2,187	)		(2,166	)		2.7	%		(4,383	)		(4,353	)		0.7	%
Net flows		700			663			345			293			701			0.1	%		1,183			994			-16.0	%
Change in market value and reinvestment		333			(8,299	)		3,932			5,814			(2,013	)	NM				2,764			3,801			37.5	%
Sales inducements deferred		8			10			10			9			9			12.5	%		18			18			0.0	%
Balance as of end-of-period, gross		89,775			82,149			86,436			92,552			91,249			1.6	%		89,775			91,249			1.6	%
Reinsurance ceded		(935	)		(920	)		(902	)		(884	)		(872	)		6.7	%		(935	)		(872	)		6.7	%
Balance as of end-of-period, net	$	88,840		$	81,229		$	85,534		$	91,668		$	90,377			1.7	%	$	88,840		$	90,377			1.7	%

Page 24

Lincoln Financial Group
Retirement Plan Services - Account Value Roll Forwards
Unaudited (millions of dollars)

	For the Three Months Ended																		For the Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
Small Market
Balance as of beginning-of-period	$	6,594		$	6,566		$	5,856		$	6,167		$	6,641			0.7	%	$	6,396		$	6,167			-3.6	%
Gross deposits		315			312			354			418			372			18.1	%		641			790			23.2	%
Withdrawals and deaths		(325	)		(336	)		(357	)		(412	)		(368	)		-13.2	%		(709	)		(780	)		-10.0	%
Net flows		(10	)		(24	)		(3	)		6			4			140.0	%		(68	)		10			114.7	%
Transfers between fixed and variable accounts		-			-			11			(11	)		-		NM				(6	)		(11	)		-83.3	%
Change in market value and reinvestment		(18	)		(686	)		303			479			(175	)	NM				244			304			24.6	%
Balance as of end-of-period	$	6,566		$	5,856		$	6,167		$	6,641		$	6,470			-1.5	%	$	6,566		$	6,470			-1.5	%

Mid - Large Market
Balance as of beginning-of-period	$	17,224		$	17,333		$	16,106		$	17,435		$	19,199			11.5	%	$	16,207		$	17,435			7.6	%
Gross deposits		704			969			1,053			920			740			5.1	%		1,535			1,660			8.1	%
Withdrawals and deaths		(657	)		(408	)		(632	)		(505	)		(395	)		39.9	%		(1,055	)		(900	)		14.7	%
Net flows		47			561			421			415			345		NM				480			760			58.3	%
Transfers between fixed and variable accounts		(17	)		(19	)		(11	)		(2	)		(5	)		70.6	%		(38	)		(7	)		81.6	%
Change in market value and reinvestment		79			(1,769	)		919			1,351			(406	)	NM				684			945			38.2	%
Balance as of end-of-period	$	17,333		$	16,106		$	17,435		$	19,199		$	19,133			10.4	%	$	17,333		$	19,133			10.4	%

Multi-Fund® and Other
Balance as of beginning-of-period	$	16,490		$	16,388		$	15,058		$	15,531		$	16,180			-1.9	%	$	16,221		$	15,531			-4.3	%
Gross deposits		180			175			163			173			179			-0.6	%		364			352			-3.3	%
Withdrawals and deaths		(395	)		(383	)		(362	)		(382	)		(334	)		15.4	%		(820	)		(716	)		12.7	%
Net flows		(215	)		(208	)		(199	)		(209	)		(155	)		27.9	%		(456	)		(364	)		20.2	%
Change in market value and reinvestment		113			(1,122	)		672			858			(231	)	NM				623			627			0.6	%
Balance as of end-of-period	$	16,388		$	15,058		$	15,531		$	16,180		$	15,794			-3.6	%	$	16,388		$	15,794			-3.6	%

Total
Balance as of beginning-of-period	$	40,308		$	40,287		$	37,020		$	39,133		$	42,020			4.2	%	$	38,824		$	39,133			0.8	%
Gross deposits		1,199			1,456			1,570			1,511			1,291			7.7	%		2,540			2,802			10.3	%
Withdrawals and deaths		(1,377	)		(1,127	)		(1,351	)		(1,299	)		(1,097	)		20.3	%		(2,584	)		(2,396	)		7.3	%
Net flows		(178	)		329			219			212			194			209.0	%		(44	)		406		NM
Transfers between fixed and variable accounts		(17	)		(19	)		-			(13	)		(5	)		70.6	%		(44	)		(18	)		59.1	%
Change in market value and reinvestment		174			(3,577	)		1,894			2,688			(812	)	NM				1,551			1,876			21.0	%
Balance as of end-of-period	$	40,287		$	37,020		$	39,133		$	42,020		$	41,397			2.8	%	$	40,287		$	41,397			2.8	%

Page 25

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

	For the Three Months Ended																		For the Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
Interest-Sensitive Life
Balance as of beginning-of-period	$	29,739		$	30,148		$	30,638		$	31,219		$	31,494			5.9	%	$	29,365		$	31,219			6.3	%
Deposits		1,126			1,165			1,297			991			990			-12.1	%		2,211			1,981			-10.4	%
Withdrawals and deaths		(296	)		(232	)		(268	)		(307	)		(321	)		-8.4	%		(591	)		(628	)		-6.3	%
Net flows		830			933			1,029			684			669			-19.4	%		1,620			1,353			-16.5	%
Contract holder assessments		(724	)		(726	)		(751	)		(710	)		(712	)		1.7	%		(1,439	)		(1,422	)		1.2	%
Reinvested interest credited		303			283			303			301			299			-1.3	%		602			600			-0.3	%
Balance as of end-of-period, gross		30,148			30,638			31,219			31,494			31,750			5.3	%		30,148			31,750			5.3	%
Reinsurance ceded		(881	)		(877	)		(870	)		(862	)		(859	)		2.5	%		(881	)		(859	)		2.5	%
Balance as of end-of-period, net	$	29,267		$	29,761		$	30,349		$	30,632		$	30,891			5.5	%	$	29,267		$	30,891			5.5	%

VUL
Balance as of beginning-of-period	$	6,171		$	6,157		$	5,375		$	5,687		$	6,202			0.5	%	$	5,962		$	5,687			-4.6	%
Deposits		148			178			209			168			147			-0.7	%		333			316			-5.1	%
Withdrawals and deaths		(110	)		(148	)		(207	)		(101	)		(93	)		15.5	%		(264	)		(195	)		26.1	%
Net flows		38			30			2			67			54			42.1	%		69			121			75.4	%
Contract holder assessments		(91	)		(93	)		(93	)		(95	)		(88	)		3.3	%		(183	)		(183	)		0.0	%
Change in market value and reinvestment		39			(719	)		403			543			(163	)	NM				309			380			23.0	%
Balance as of end-of-period, gross		6,157			5,375			5,687			6,202			6,005			-2.5	%		6,157			6,005			-2.5	%
Reinsurance ceded		(857	)		(717	)		(758	)		(826	)		(775	)		9.6	%		(857	)		(775	)		9.6	%
Balance as of end-of-period, net	$	5,300		$	4,658		$	4,929		$	5,376		$	5,230			-1.3	%	$	5,300		$	5,230			-1.3	%

Total
Balance as of beginning-of-period	$	35,910		$	36,305		$	36,013		$	36,906		$	37,696			5.0	%	$	35,327		$	36,906			4.5	%
Deposits		1,274			1,343			1,506			1,159			1,137			-10.8	%		2,544			2,297			-9.7	%
Withdrawals and deaths		(406	)		(380	)		(475	)		(408	)		(414	)		-2.0	%		(855	)		(823	)		3.7	%
Net flows		868			963			1,031			751			723			-16.7	%		1,689			1,474			-12.7	%
Contract holder assessments		(815	)		(819	)		(844	)		(805	)		(800	)		1.8	%		(1,622	)		(1,605	)		1.0	%
Change in market value and reinvestment		342			(436	)		706			844			136			-60.2	%		911			980			7.6	%
Balance as of end-of-period, gross		36,305			36,013			36,906			37,696			37,755			4.0	%		36,305			37,755			4.0	%
Reinsurance ceded		(1,738	)		(1,594	)		(1,628	)		(1,688	)		(1,634	)		6.0	%		(1,738	)		(1,634	)		6.0	%
Balance as of end-of-period, net	$	34,567		$	34,419		$	35,278		$	36,008		$	36,121			4.5	%	$	34,567		$	36,121			4.5	%

Page 26

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

	For the Three Months Ended																		For the Six Months Ended
	06/30/11			09/30/11			12/31/11			03/31/12			06/30/12			Change			06/30/11			06/30/12			Change
Revenues
Operating revenues	$	2,839		$	2,735		$	2,715		$	2,824		$	2,882			1.5	%	$	5,578		$	5,707			2.3	%
Excluded realized gain (loss)		(33	)		(186	)		(149	)		(112	)		18			154.5	%		(53	)		(95	)		-79.2	%
Amortization of DFEL on benefit ratio unlocking		-			(3	)		1			1			(1	)	NM				-			1		NM
Amortization of deferred gains arising from reserve changes on business sold through reinsurance		1			1			1			1			-			-100.0	%		1			1			0.0	%
Total revenues	$	2,807		$	2,547		$	2,568		$	2,714		$	2,899			3.3	%	$	5,526		$	5,614			1.6	%

Excluded Realized Gain (Loss) Net of Benefit Ratio Unlocking, After-Tax
Total excluded realized gain (loss)	$	(21	)	$	(121	)	$	(97	)	$	(73	)	$	12			157.1	%	$	(34	)	$	(61	)		-79.4	%
Benefit ratio unlocking		(1	)		(42	)		25			23			(10	)	NM				3			13		NM
Net gain (loss), after-tax	$	(22	)	$	(163	)	$	(72	)	$	(50	)	$	2			109.1	%	$	(31	)	$	(48	)		-54.8	%

Net Income
Income (loss) from operations	$	326		$	329		$	280		$	296		$	322			-1.2	%	$	648		$	617			-4.8	%
Excluded realized gain (loss)		(21	)		(121	)		(97	)		(73	)		12			157.1	%		(34	)		(61	)		-79.4	%
Benefit ratio unlocking		(1	)		(42	)		25			23			(10	)	NM				3			13		NM
Income (loss) from reserve changes (net of related amortization) on business sold through reinsurance		-			-			-			-			-		NM				-			1		NM
Gain (loss) on early extinguishment of debt		-			(5	)		-			-			-		NM				-			-		NM
Impairment of intangibles		-			-			(747	)		-			-		NM				-			-		NM
Income (loss) from discontinued operations		-			(8	)		-			(1	)		-		NM				-			(1	)	NM
Net income (loss)	$	304		$	153		$	(539	)	$	245		$	324			6.6	%	$	617		$	569			-7.8	%

Earnings (Loss) Per Common Share - Diluted
Income (loss) from operations	$	1.01		$	1.03		$	0.92		$	1.00		$	1.09			7.9	%	$	2.01		$	2.11			5.0	%
Excluded realized gain (loss)		(0.06	)		(0.38	)		(0.33	)		(0.25	)		0.04			166.7	%		(0.10	)		(0.22	)	NM
Benefit ratio unlocking		-			(0.13	)		0.08			0.08			(0.03	)	NM				0.01			0.05		NM
Gain (loss) on early extinguishment of debt		-			(0.02	)		-			-			-		NM				-			-		NM
Impairment of intangibles		-			-			(2.51	)		-			-		NM				-			-		NM
Income (loss) from discontinued operations		-			(0.03	)		-			-			-		NM				-			-		NM
Adjustment attributable to using different average diluted shares		-			-			0.03			-			-		NM				-			-		NM
Net income (loss)	$	0.95		$	0.47		$	(1.81	)	$	0.83		$	1.10			15.8	%	$	1.92		$	1.94			1.0	%

Page 27

LINCOLN NATIONAL CORP - FORM 8-K - EX-99.2 - LINCOLN NATIONAL CORPORATION STATISTICAL SUPPLEMENT - August 1, 2012

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