ex99-2.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
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:
	•	MoneyGuard® (our linked-benefit product) – 15% of single premium deposits;
	•	MoneyGuard® (flexible premium option), 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;
	•	Term - 100% of first year paid premiums;
	•	Annuities - deposits from new and existing customers; and
	•	Group Protection - annualized first year premiums from new policies.

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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 November 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 Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change			9/30/11			9/30/12			Change
Revenues
Insurance premiums	$	559		$	573		$	589		$	630		$	606			8.4	%	$	1,721		$	1,825			6.0	%
Insurance fees		864			854			907			887			990			14.6	%		2,582			2,784			7.8	%
Net investment income		1,151			1,129			1,166			1,197			1,146			-0.4	%		3,522			3,509			-0.4	%
Realized gain (loss):
Other-than-temporary impairment ("OTTI")		(26	)		(25	)		(47	)		(33	)		(32	)		-23.1	%		(98	)		(112	)		-14.3	%
Realized gain (loss), excluding OTTI		(137	)		(99	)		(38	)		76			102			151.1	%		(72	)		140			294.4	%
Total realized gain (loss)		(163	)		(124	)		(85	)		43			70			142.9	%		(170	)		28			116.5	%
Amortization of deferred gains on business sold through reinsurance		19			19			19			18			19			0.0	%		56			56			0.0	%
Other revenues and fees		117			117			118			124			123			5.1	%		362			366			1.1	%
Total revenues		2,547			2,568			2,714			2,899			2,954			16.0	%		8,073			8,568			6.1	%

Expenses
Interest credited		625			624			625			616			610			-2.4	%		1,864			1,851			-0.7	%
Benefits		664			819			858			945			811			22.1	%		2,527			2,615			3.5	%
Commissions and other expenses		1,024			797			856			828			1,047			2.2	%		2,467			2,731			10.7	%
Interest and debt expense		79			70			68			68			68			-13.9	%		223			203			-9.0	%
Impairment of intangibles		-			747			-			-			-		NM				-			-		NM
Total expenses		2,392			3,057			2,407			2,457			2,536			6.0	%		7,081			7,400			4.5	%
Income (loss) from continuing operations before taxes		155			(489	)		307			442			418			169.7	%		992			1,168			17.7	%
Federal income tax expense (benefit)		(6	)		50			61			118			45		NM				214			224			4.7	%
Income (loss) from continuing operations		161			(539	)		246			324			373			131.7	%		778			944			21.3	%
Income (loss) from discontinued operations		(8	)		-			(1	)		-			29		NM				(8	)		27		NM
Net income (loss)		153			(539	)		245			324			402			162.7	%		770			971			26.1	%
Adjustment for LNC stock units in our deferred compensation plans		(6	)		-			-			(4	)		-			100.0	%		(6	)		-			100.0	%
Net income (loss) available to common stockholders - diluted	$	147		$	(539	)	$	245		$	320		$	402			173.5	%	$	764		$	971			141.5	%

Earnings (Loss) Per Common Share - Diluted
Income (loss) from continuing operations	$	0.50		$	(1.81	)	$	0.83		$	1.10		$	1.31			162.0	%	$	2.43		$	3.26			34.2	%
Income (loss) from discontinued operations		(0.03	)		-			-			-			0.10		NM				(0.03	)		0.09		NM
Net income (loss)	$	0.47		$	(1.81	)	$	0.83		$	1.10		$	1.41			200.0	%	$	2.40		$	3.35			39.6	%

Page 3

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

	As of
	9/30/11		12/31/11		3/31/12		6/30/12		9/30/12		Change
ASSETS
Investments:
Available-for-sale ("AFS") securities:
Corporate bonds	$	58,263	$	59,261	$	60,599	$	63,914	$	66,476		14.1	%
U.S. government bonds		286		494		486		517		508		77.6	%
Foreign government bonds		642		733		650		664		661		3.0	%
Mortgage-backed securities		10,118		9,639		9,095		8,504		7,863		-22.3	%
Asset-backed collateralized debt obligations		111		102		102		120		147		32.4	%
State and municipal bonds		3,969		4,047		4,126		4,284		4,338		9.3	%
Hybrid and redeemable preferred securities		1,202		1,157		1,196		1,188		1,186		-1.3	%
VIEs' fixed maturity securities		700		700		702		705		706		0.9	%
Equity securities		137		139		126		154		156		13.9	%
Total AFS securities		75,428		76,272		77,082		80,050		82,041		8.8	%
Trading securities		2,726		2,675		2,650		2,649		2,650		-2.8	%
Mortgage loans on real estate		6,893		6,942		6,938		6,804		6,690		-2.9	%
Real estate		136		137		113		116		112		-17.6	%
Policy loans		2,874		2,884		2,842		2,829		2,780		-3.3	%
Derivative investments		3,029		3,151		2,244		3,399		3,072		1.4	%
Other investments		1,105		1,069		1,043		1,041		1,123		1.6	%
Total investments		92,191		93,130		92,912		96,888		98,468		6.8	%
Cash and invested cash		4,833		4,510		3,516		5,257		4,373		-9.5	%
DAC and VOBA		6,705		6,776		6,880		6,505		5,813		-13.3	%
Premiums and fees receivable		383		408		437		388		366		-4.4	%
Accrued investment income		1,023		981		1,026		1,021		1,067		4.3	%
Reinsurance recoverables		6,659		6,526		6,534		6,601		6,424		-3.5	%
Funds withheld reinsurance assets		881		874		866		863		846		-4.0	%
Goodwill		3,019		2,273		2,273		2,273		2,273		-24.7	%
Other assets		2,433		2,536		2,486		2,475		2,502		2.8	%
Separate account assets		78,195		83,477		91,088		88,839		93,326		19.4	%
Total assets	$	196,322	$	201,491	$	208,018	$	211,110	$	215,458		9.7	%

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

	As of
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Future contract benefits	$	19,988		$	19,813		$	18,784		$	19,930		$	19,232			-3.8	%
Other contract holder funds		68,552			69,466			70,027			70,422			70,706			3.1	%
Short-term debt		550			300			300			300			200			-63.6	%
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		4,226			4,269			4,484			4,597			4,372			3.5	%
Reinsurance related embedded derivatives		177			168			158			185			215			21.5	%
Funds withheld reinsurance liabilities		1,072			1,045			1,043			999			987			-7.9	%
Deferred gain on business sold through reinsurance		412			394			375			356			338			-18.0	%
Payables for collateral on investments		3,855			3,733			2,875			5,070			4,566			18.4	%
VIEs' liabilities		203			193			149			158			121			-40.4	%
Other liabilities		3,983			4,273			4,352			4,950			5,036			26.4	%
Separate account liabilities		78,195			83,477			91,088			88,839			93,326			19.4	%
Total liabilities		182,335			188,253			194,757			196,928			200,221			9.8	%

Stockholders' Equity
Common stock		7,792			7,590			7,448			7,310			7,214			-7.4	%
Retained earnings		3,531			2,969			3,191			3,493			3,873			9.7	%
AOCI:
Unrealized gain (loss) on AFS securities		2,842			2,948			2,934			3,627			4,354			53.2	%
Unrealized OTTI on AFS securities		(110	)		(110	)		(119	)		(117	)		(99	)		10.0	%
Unrealized gain (loss) on derivative instruments		112			119			89			150			177			58.0	%
Foreign currency translation adjustment		3			-			(3	)		(4	)		(3	)	NM
Funded status of employee benefit plans		(183	)		(278	)		(279	)		(277	)		(279	)		-52.5	%
Total AOCI		2,664			2,679			2,622			3,379			4,150			55.8	%
Total stockholders' equity		13,987			13,238			13,261			14,182			15,237			8.9	%
Total liabilities and stockholders' equity	$	196,322		$	201,491		$	208,018		$	211,110		$	215,458			9.7	%

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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 Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change			9/30/11			9/30/12			Change
Income (Loss)
Income (loss) from operations	$	329		$	280		$	296		$	322		$	335			1.8	%	$	977		$	952			-2.6	%
Net income (loss)		153			(539	)		245			324			402			162.7	%		770			971			26.1	%

Earnings (Loss) Per Diluted Share
Income (loss) from operations	$	1.03		$	0.92		$	1.00		$	1.09		$	1.18			14.6	%	$	3.05		$	3.29			7.9	%
Net income (loss)		0.47			(1.81	)		0.83			1.10			1.41			200.0	%		2.40			3.35			39.6	%

Average Stockholders' Equity
Average equity, including AOCI	$	13,272		$	13,612		$	13,249		$	13,722		$	14,710			10.8	%	$	12,506		$	13,894			11.1	%
Average AOCI		1,945			2,671			2,650			3,000			3,764			93.5	%		1,286			3,138			144.0	%
Average equity, excluding AOCI	$	11,327		$	10,941		$	10,599		$	10,722		$	10,946			-3.4	%	$	11,220		$	10,756			-4.1	%

ROE
Income (loss) from operations		11.6	%		10.2	%		11.2	%		12.0	%		12.2	%					11.6	%		11.8	%
Net income (loss)		5.4	%		-19.7	%		9.3	%		12.1	%		14.7	%					9.2	%		12.0	%

Per Share
Dividends declared during the period	$	0.05		$	0.08		$	0.08		$	0.08		$	0.08			60.0	%	$	0.15		$	0.24			60.0	%
Book value, including AOCI		46.34			45.42			46.44			50.77			55.36			19.5	%		46.34			55.36			19.5	%
Book value, excluding AOCI		37.51			36.23			37.25			38.68			40.28			7.4	%		37.51			40.28			7.4	%

Shares
Repurchased during the period		6.7			10.4			6.0			6.5			4.2			-38.1	%		14.3			16.6			16.3	%
Average for the period - diluted		312.0			303.4			295.9			290.0			284.7			-8.8	%		318.5			289.8			-9.0	%
End-of-period - assuming conversion of preferred		301.8			291.5			285.6			279.3			275.2			-8.8	%		301.8			275.2			-8.8	%
End-of-period - diluted		306.9			297.0			293.0			286.8			282.4			-8.0	%		306.9			282.4			-8.0	%

Cash Returned to Common Stockholders
Shares repurchased	$	150		$	200		$	150		$	150		$	100			-33.3	%	$	375		$	400			6.7	%
Common dividends		15			15			23			23			22			46.7	%		47			68			44.7	%
Total cash returned to common stockholders	$	165		$	215		$	173		$	173		$	122			-26.1	%	$	422		$	468			10.9	%

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

	For the Three Months Ended																		For the Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change			9/30/11			9/30/12			Change
Income (Loss) from Operations
Annuities	$	153		$	131		$	137		$	158		$	139			-9.2	%	$	442		$	433			-2.0	%
Retirement Plan Services		39			33			35			38			29			-25.6	%		129			101			-21.7	%
Life Insurance		154			138			142			138			154			0.0	%		433			434			0.2	%
Group Protection		27			20			16			27			16			-40.7	%		77			59			-23.4	%
Other Operations		(44	)		(42	)		(34	)		(39	)		(3	)		93.2	%		(104	)		(75	)		27.9	%
Income (loss) from operations	$	329		$	280		$	296		$	322		$	335			1.8	%	$	977		$	952			-2.6	%

Average Equity, Excluding AOCI
Segment equity, excluding goodwill:
Annuities	$	2,580		$	2,828		$	2,957		$	3,088		$	3,093			19.9	%	$	2,396		$	3,046			27.1	%
Retirement Plan Services		864			857			905			995			1,025			18.6	%		878			975			11.0	%
Life Insurance		5,660			5,628			5,710			5,864			5,938			4.9	%		5,628			5,838			3.7	%
Group Protection		875			889			906			927			955			9.1	%		880			929			5.6	%
Total segment equity, excluding goodwill		9,979			10,202			10,478			10,874			11,011			10.3	%		9,782			10,788			10.3	%
Other Operations and goodwill		1,348			739			121			(152	)		(65	)	NM				1,438			(32	)	NM
Total average equity, excluding AOCI	$	11,327		$	10,941		$	10,599		$	10,722		$	10,946			-3.4	%	$	11,220		$	10,756			-4.1	%

ROE
Segment ROE, excluding goodwill:
Annuities		23.8	%		18.5	%		18.5	%		20.4	%		17.9	%					24.6	%		19.0	%
Retirement Plan Services		18.1	%		15.6	%		15.3	%		15.2	%		11.2	%					19.5	%		13.8	%
Life Insurance		10.9	%		9.8	%		10.0	%		9.4	%		10.3	%					10.2	%		9.9	%
Group Protection		12.3	%		9.2	%		7.1	%		11.6	%		6.5	%					11.6	%		8.4	%
Consolidated ROE - income (loss) from operations		11.6	%		10.2	%		11.2	%		12.0	%		12.2	%					11.6	%		11.8	%

Page 6

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

	For the Three Months Ended													For the Nine Months Ended
	9/30/11		12/31/11		3/31/12		6/30/12		9/30/12		Change			9/30/11		9/30/12		Change
Annuities
Operating revenues	$	711	$	692	$	731	$	734	$	745		4.8	%	$	2,179	$	2,210		1.4	%
Average account values		85,584		84,708		89,537		89,890		92,323		7.9	%		86,815		90,604		4.4	%
Net flows		663		345		293		701		396		-40.3	%		1,845		1,391		-24.6	%

Retirement Plan Services
Operating revenues	$	247	$	246	$	252	$	258	$	255		3.2	%	$	771	$	765		-0.8	%
Average account values		38,911		38,634		40,834		41,315		42,315		8.7	%		39,592		41,472		4.7	%
Net flows		329		219		212		194		232		-29.5	%		285		638		123.9	%

Life Insurance
Operating revenues	$	1,176	$	1,187	$	1,232	$	1,237	$	1,296		10.2	%	$	3,552	$	3,765		6.0	%
Average account values		34,493		34,848		35,643		36,064		36,355		5.4	%		34,239		36,021		5.2	%
Average in-force face amount		572,585		577,137		579,897		581,015		583,264		1.9	%		568,709		581,392		2.2	%
Net flows		963		1,031		751		723		695		-27.8	%		2,652		2,169		-18.2	%

Group Protection
Operating revenues	$	479	$	481	$	504	$	540	$	517		7.9	%	$	1,458	$	1,560		7.0	%
Non-medical earned premiums		410		412		431		441		450		9.8	%		1,221		1,322		8.3	%

Consolidated
Operating revenues	$	2,735	$	2,715	$	2,824	$	2,882	$	2,914		6.5	%	$	8,312	$	8,621		3.7	%
Average account values		158,988		158,190		166,014		167,269		170,993		7.6	%		160,646		168,097		4.6	%
Net flows		1,955		1,595		1,256		1,618		1,323		-32.3	%		4,782		4,198		-12.2	%

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 Nine Months Ended
	9/30/11		12/31/11		3/31/12		6/30/12		9/30/12		Change			9/30/11		9/30/12		Change
Deposits
Annuities	$	2,709	$	2,375	$	2,480	$	2,867	$	2,677		-1.2	%	$	8,274	$	8,025		-3.0	%
Retirement Plan Services		1,456		1,570		1,511		1,291		1,717		17.9	%		3,996		4,519		13.1	%
Life Insurance		1,343		1,506		1,159		1,137		1,106		-17.6	%		3,887		3,403		-12.5	%
Total deposits	$	5,508	$	5,451	$	5,150	$	5,295	$	5,500		-0.1	%	$	16,157	$	15,947		-1.3	%

Net Flows
Annuities	$	663	$	345	$	293	$	701	$	396		-40.3	%	$	1,845	$	1,391		-24.6	%
Retirement Plan Services		329		219		212		194		232		-29.5	%		285		638		123.9	%
Life Insurance		963		1,031		751		723		695		-27.8	%		2,652		2,169		-18.2	%
Total net flows	$	1,955	$	1,595	$	1,256	$	1,618	$	1,323		-32.3	%	$	4,782	$	4,198		-12.2	%

Account Balances as of End-of-Period
Annuities	$	81,229	$	85,534	$	91,668	$	90,377	$	94,158		15.9	%	$	81,229	$	94,158		15.9	%
Retirement Plan Services		37,020		39,133		42,020		41,397		43,103		16.4	%		37,020		43,103		16.4	%
Life Insurance		34,419		35,278		36,008		36,121		36,589		6.3	%		34,419		36,589		6.3	%
Total account balances	$	152,668	$	159,945	$	169,696	$	167,895	$	173,850		13.9	%	$	152,668	$	173,850		13.9	%

Average Account Balances
Annuities	$	85,584	$	84,708	$	89,537	$	89,890	$	92,323		7.9	%	$	86,815	$	90,604		4.4	%
Retirement Plan Services		38,911		38,634		40,834		41,315		42,315		8.7	%		39,592		41,472		4.7	%
Life Insurance		34,493		34,848		35,643		36,064		36,355		5.4	%		34,239		36,021		5.2	%
Total average account balances	$	158,988	$	158,190	$	166,014	$	167,269	$	170,993		7.6	%	$	160,646	$	168,097		4.6	%

Page 8

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

	For the Three Months Ended													For the Nine Months Ended
	9/30/11		12/31/11		3/31/12		6/30/12		9/30/12		Change			9/30/11		9/30/12		Change
Sales
Annuities:
Variable	$	2,155	$	2,028	$	2,185	$	2,422	$	2,188		1.5	%	$	6,694	$	6,796		1.5	%
Fixed		554		347		295		445		489		-11.7	%		1,580		1,229		-22.2	%
Total Annuities	$	2,709	$	2,375	$	2,480	$	2,867	$	2,677		-1.2	%	$	8,274	$	8,025		-3.0	%

Retirement Plan Services:
Small market	$	312	$	354	$	418	$	372	$	362		16.0	%	$	953	$	1,152		20.9	%
Mid - large market		969		1,053		920		746		1,186		22.4	%		2,504		2,852		13.9	%
Multi-Fund® and other variable		175		163		173		173		169		-3.4	%		539		515		-4.5	%
Total Retirement Plan Services	$	1,456	$	1,570	$	1,511	$	1,291	$	1,717		17.9	%	$	3,996	$	4,519		13.1	%

Life Insurance:
UL, excluding MoneyGuard®	$	74	$	75	$	47	$	51	$	38		-48.6	%	$	242	$	136		-43.8	%
MoneyGuard®		48		65		41		41		40		-16.7	%		121		121		0.0	%
VUL		13		16		10		12		9		-30.8	%		34		31		-8.8	%
COLI and BOLI		8		57		11		11		9		12.5	%		35		31		-11.4	%
Term		12		15		13		13		16		33	%		39		42		7.7	%
Total Life Insurance	$	155	$	228	$	122	$	128	$	112		-27.7	%	$	471	$	361		-23.4	%

Group Protection:
Life	$	31	$	91	$	29	$	33	$	41		32.3	%	$	72	$	101		40.3	%
Disability		34		93		28		38		41		20.6	%		83		107		28.9	%
Dental		10		25		10		18		15		50.0	%		32		44		37.5	%
Total Group Protection	$	75	$	209	$	67	$	89	$	97		29.3	%	$	187	$	252		34.8	%

Page 9

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

	For the Three Months Ended																		For the Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change			9/30/11			9/30/12			Change
Operating Revenues
Annuities	$	711		$	692		$	731		$	734		$	745			4.8	%	$	2,179		$	2,210		1.4	%
Retirement Plan Services		247			246			252			258			255			3.2	%		771			765		-0.8	%
Life Insurance		1,176			1,187			1,232			1,237			1,296			10.2	%		3,552			3,765		6.0	%
Group Protection		479			481			504			540			517			7.9	%		1,458			1,560		7.0	%
Other Operations		122			109			105			113			101			-17.2	%		352			321		-8.8	%
Total	$	2,735		$	2,715		$	2,824		$	2,882		$	2,914			6.5	%	$	8,312		$	8,621		3.7	%

General and Administrative Expenses, Net of Amounts Capitalized
Annuities	$	91		$	100		$	107		$	97		$	103			13.2	%	$	285		$	307		7.7	%
Retirement Plan Services		62			69			67			70			73			17.7	%		189			211		11.6	%
Life Insurance		100			110			108			102			105			5.0	%		297			315		6.1	%
Group Protection		48			55			52			53			57			18.8	%		138			162		17.4	%
Other Operations		20			15			23			23			25			25.0	%		58			70		20.7	%
Total	$	321		$	349		$	357		$	345		$	363			13.1	%	$	967		$	1,065		10.1	%

General and Administrative Expenses, Net of Amounts Capitalized, As a % of Operating Revenues
Annuities		12.8	%		14.4	%		14.6	%		13.2	%		13.9	%					13.1	%		13.9	%
Retirement Plan Services		25.0	%		28.2	%		26.6	%		27.3	%		28.7	%					24.6	%		27.5	%
Life Insurance		8.5	%		9.3	%		8.8	%		8.3	%		8.1	%					8.4	%		8.4	%
Group Protection		10.0	%		11.5	%		10.3	%		9.9	%		11.0	%					9.4	%		10.4	%
Other Operations		17.4	%		13.4	%		21.3	%		19.4	%		24.8	%					16.4	%		21.7	%
Total		11.7	%		12.9	%		12.6	%		12.0	%		12.5	%					11.6	%		12.4	%

Page 10

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

	For the Three Months Ended																		For the Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change			9/30/11			9/30/12			Change
Operating Commissions and Other Expenses Incurred
General and administrative expenses	$	368		$	409		$	399		$	394		$	406			10.3	%	$	1,100		$	1,199			9.0	%
Commissions		476			483			448			466			453			-4.8	%		1,450			1,369			-5.6	%
Media expenses		17			18			16			16			16			-5.9	%		51			49			-3.9	%
Taxes, licenses and fees		75			62			62			55			70			-6.7	%		191			187			-2.1	%
Interest and debt expense		71			70			68			68			68			-4.2	%		215			203			-5.6	%
Expenses associated with reserve financing and unrelated letters of credit		11			13			13			13			14			27.3	%		34			40			17.6	%
Total operating commissions and other expenses incurred		1,018			1,055			1,006			1,012			1,027			0.9	%		3,041			3,047			0.2	%

Less Amounts Capitalized
General and administrative expenses		(47	)		(60	)		(42	)		(49	)		(43	)		8.5	%		(133	)		(134	)		-0.8	%
Commissions		(281	)		(290	)		(238	)		(260	)		(242	)		13.9	%		(862	)		(741	)		14.0	%
Taxes, licenses and fees		(13	)		(14	)		(10	)		(10	)		(8	)		38.5	%		(36	)		(27	)		25.0	%
Total amounts capitalized		(341	)		(364	)		(290	)		(319	)		(293	)		14.1	%		(1,031	)		(902	)		12.5	%
Total expenses incurred, net of amounts capitalized, excluding amortization		677			691			716			693			734			8.4	%		2,010			2,145			6.7	%

Amortization
Amortization of DAC and VOBA		425			170			200			204			376			-11.5	%		676			780			15.4	%
Amortization of intangibles		1			1			1			1			1			0.0	%		3			3			0.0	%
Total amortization		426			171			201			205			377			-11.5	%		679			783			15.3	%
Total operating commissions and other expenses	$	1,103		$	862		$	917		$	898		$	1,111			0.7	%	$	2,689		$	2,928			8.9	%

Page 11

Lincoln Financial Group
Interest Rate Yields and Spreads By Segment
Unaudited

	For the Three Months Ended																		For the Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change			9/30/11			9/30/12			Change
Annuities
Investments on reserves, excluding alternative		5.08	%		4.98	%		4.93	%		4.86	%		4.83	%		(25	)		5.18	%		4.88	%		(30	)
Prepayment and make whole premiums		0.12	%		0.09	%		0.04	%		0.07	%		0.04	%		(8	)		0.16	%		0.05	%		(11	)
Alternative investments		0.00	%		0.00	%		0.00	%		0.01	%		0.00	%		-			0.00	%		0.00	%		-
Net investment income yield on reserves		5.20	%		5.07	%		4.97	%		4.94	%		4.87	%		(33	)		5.34	%		4.93	%		(41	)
Interest rate credited to contract holders		3.33	%		3.26	%		3.15	%		3.03	%		2.94	%		(39	)		3.34	%		3.04	%		(30	)
Interest rate spread		1.87	%		1.81	%		1.82	%		1.91	%		1.93	%		6			2.00	%		1.89	%		(11	)

Retirement Plan Services
Investments on reserves, excluding alternative		5.53	%		5.40	%		5.34	%		5.28	%		5.23	%		(30	)		5.57	%		5.28	%		(29	)
Prepayment and make whole premiums		0.04	%		0.05	%		0.04	%		0.02	%		0.01	%		(3	)		0.20	%		0.02	%		(18	)
Alternative investments		0.00	%		0.01	%		0.01	%		0.02	%		0.00	%		-			0.01	%		0.01	%		-
Net investment income yield on reserves		5.57	%		5.46	%		5.39	%		5.32	%		5.24	%		(33	)		5.78	%		5.31	%		(47	)
Interest rate credited to contract holders		3.31	%		3.28	%		3.22	%		3.22	%		3.22	%		(9	)		3.34	%		3.22	%		(12	)
Interest rate spread		2.26	%		2.18	%		2.17	%		2.10	%		2.02	%		(24	)		2.44	%		2.09	%		(35	)

Life Insurance
Attributable to interest-sensitive products:
Investments on reserves, excluding alternative		5.74	%		5.71	%		5.77	%		5.75	%		5.60	%		(14	)		5.82	%		5.70	%		(12	)
Prepayment and make whole premiums		0.06	%		0.03	%		0.02	%		0.07	%		0.02	%		(4	)		0.08	%		0.04	%		(4	)
Alternative investments		0.16	%		0.00	%		0.17	%		0.15	%		0.03	%		(13	)		0.26	%		0.12	%		(14	)
Net investment income yield on reserves		5.96	%		5.74	%		5.96	%		5.97	%		5.65	%		(31	)		6.16	%		5.86	%		(30	)
Interest rate credited to contract holders		4.10	%		4.05	%		3.95	%		3.92	%		3.92	%		(18	)		4.09	%		3.93	%		(16	)
Interest rate spread		1.86	%		1.69	%		2.01	%		2.05	%		1.73	%		(13	)		2.07	%		1.93	%		(14	)

Attributable to traditional products:
Investments on reserves, excluding alternative		5.90	%		5.81	%		5.73	%		5.79	%		5.67	%		(23	)		5.93	%		5.73	%		(20	)
Prepayment and make whole premiums		0.03	%		0.01	%		0.00	%		0.04	%		0.00	%		(3	)		0.04	%		0.01	%		(3	)
Alternative investments		0.00	%		0.01	%		0.01	%		0.02	%		0.00	%		-			0.01	%		0.01	%		-
Net investment income yield on reserves		5.93	%		5.83	%		5.74	%		5.85	%		5.67	%		(26	)		5.98	%		5.75	%		(23	)

Page 12

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

	As of 9/30/11					As of 12/31/11					As of 9/30/12
	Amount		%			Amount		%			Amount		%
AFS and Trading Securities, at Fair Value
AFS securities:
Corporate bonds	$	58,263		74.5	%	$	59,261		75.1	%	$	66,476		78.5	%
U.S. government bonds		286		0.4	%		494		0.6	%		508		0.6	%
Foreign government bonds		642		0.8	%		733		0.9	%		661		0.8	%
Mortgage-backed securities		10,118		12.9	%		9,639		12.2	%		7,863		9.3	%
Asset-backed collateralized debt obligations		111		0.1	%		102		0.1	%		147		0.2	%
State and municipal bonds		3,969		5.1	%		4,047		5.1	%		4,338		5.1	%
Hybrid and redeemable preferred securities		1,202		1.5	%		1,157		1.5	%		1,186		1.4	%
VIEs' fixed maturity securities		700		0.9	%		700		0.9	%		706		0.8	%
Equity securities		137		0.2	%		139		0.2	%		156		0.2	%
Total AFS securities		75,428		96.5	%		76,272		96.6	%		82,041		96.9	%
Trading securities		2,726		3.5	%		2,675		3.4	%		2,650		3.1	%
Total AFS and trading securities	$	78,154		100.0	%	$	78,947		100.0	%	$	84,691		100.0	%

AFS and Trading Securities, at Amortized Cost
Fixed maturity securities	$	71,395		99.8	%	$	71,960		99.8	%	$	74,664		99.8	%
Equity securities		132		0.2	%		137		0.2	%		144		0.2	%
Total AFS and trading securities	$	71,527		100.0	%	$	72,097		100.0	%	$	74,808		100.0	%

% of Fixed Maturity AFS Securities, at Amortized Cost
Investment grade				95.0	%				94.4	%				94.8	%
Below investment grade				5.0	%				5.6	%				5.2	%

	For the Three Months Ended																		For the Nine Months Ended
	09/30/11			12/31/11			03/31/12			06/30/12			09/30/12			Change			09/30/11			09/30/12			Change
Net Investment Income	$	1,151		$	1,129		$	1,166		$	1,197		$	1,146			-0.4	%	$	3,522		$	3,509			-0.4	%

Average Invested Assets, at Amortized Cost		82,254			83,211			83,883			84,958			85,802			4.3	%		81,117			84,881			4.6	%

Net Investment Income Yield		5.60	%		5.43	%		5.56	%		5.64	%		5.34	%		(26	)		5.79	%		5.51	%		(28	)

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 Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change			9/30/11			9/30/12			Change
Realized Gain (Loss), Pre-Tax
Total operating realized gain (loss)	$	23		$	25		$	27		$	25		$	31			34.8	%	$	69		$	83			20.3	%
Total excluded realized gain (loss)		(186	)		(149	)		(112	)		18			39			121.0	%		(239	)		(55	)		77.0	%
Total realized gain (loss), pre-tax	$	(163	)	$	(124	)	$	(85	)	$	43		$	70			142.9	%	$	(170	)	$	28			116.5	%

Realized Gain (Loss) Net of Benefit Ratio Unlocking, After-Tax
Realized gain (loss) related to investments	$	(98	)	$	(28	)	$	6		$	(45	)	$	3			103.1	%	$	(123	)	$	(35	)		71.5	%
Variable annuity net derivative results:
Hedge program performance, including for GLB reserves hedged		(169	)		5			19			(38	)		99			158.6	%		(199	)		81			140.7	%
GLB non-performance risk component		106			(49	)		(85	)		86			(61	)	NM				127			(60	)	NM
Total variable annuity net derivative results		(63	)		(44	)		(66	)		48			38			160.3	%		(72	)		21			129.2	%
Indexed annuity forward-starting option		(2	)		-			10			(1	)		(6	)	NM				-			3		NM
Excluded realized gain (loss) net of benefit ratio unlocking, after-tax	$	(163	)	$	(72	)	$	(50	)	$	2		$	35			121.5	%	$	(195	)	$	(11	)		94.4	%

Components of Realized Gain (Loss) Related to Investments, After-Tax
OTTI	$	(17	)	$	(16	)	$	(31	)	$	(21	)	$	(21	)		-23.1	%	$	(64	)	$	(73	)		-14.3	%
Other realized gain (loss) related to certain investments		(12	)		(21	)		(1	)		(12	)		(14	)		-17.4	%		4			(26	)	NM
Gain (loss) on the mark-to-market on certain instruments		(69	)		9			38			(12	)		38			155.1	%		(63	)		64			201.6	%
Total realized gain (loss) related to investments, after-tax	$	(98	)	$	(28	)	$	6		$	(45	)	$	3			103.1	%	$	(123	)	$	(35	)		71.5	%

Page 14

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

	As of
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change
Leverage Ratio
Short-term debt	$	550		$	300		$	300		$	300		$	200			-63.6	%
Long-term debt		5,348			5,391			5,606			5,719			5,494			2.7	%
Total debt		5,898			5,691			5,906			6,019			5,694			-3.5	%
Less:
Long-term operating debt (1)		1,122			1,122			1,122			1,122			1,122			0.0	%
75% of capital securities		908			908			908			908			908			0.0	%
Carrying value of fair value hedges		278			320			234			330			330			18.7	%
Total numerator	$	3,590		$	3,341		$	3,642		$	3,659		$	3,334			-7.1	%

Stockholders' equity, excluding AOCI	$	11,323		$	10,559		$	10,639		$	10,803		$	11,087			-2.1	%
Total debt		5,898			5,691			5,906			6,019			5,694			-3.5	%
Total denominator	$	17,221		$	16,250		$	16,545		$	16,822		$	16,781			-2.6	%

Leverage ratio		20.8	%		20.6	%		22.0	%		21.8	%		19.9	%

Holding Company Available Cash	$	771		$	589		$	876		$	838		$	618			-19.8	%

	Ratings as of November 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 Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change			9/30/11			9/30/12			Change
Income (Loss) from Operations
Operating revenues:
Insurance premiums	$	15		$	14		$	17		$	18		$	29			93.3	%	$	60		$	64			6.7	%
Insurance fees		317			299			325			323			332			4.7	%		948			980			3.4	%
Net investment income		271			270			272			279			268			-1.1	%		837			819			-2.2	%
Operating realized gain (loss)		23			25			27			25			30			30.4	%		69			82			18.8	%
Other revenues and fees		85			84			90			89			86			1.2	%		265			265			0.0	%
Total operating revenues		711			692			731			734			745			4.8	%		2,179			2,210			1.4	%
Operating expenses:
Interest credited		177			169			171			163			146			-17.5	%		530			480			-9.4	%
Benefits		87			47			45			49			131			50.6	%		165			226			37.0	%
Commissions incurred		182			173			183			202			203			11.5	%		552			588			6.5	%
Other expenses incurred		177			182			196			187			190			7.3	%		553			573			3.6	%
Amounts capitalized		(137	)		(123	)		(124	)		(149	)		(138	)		-0.7	%		(405	)		(411	)		-1.5	%
Amortization		65			90			98			86			40			-38.5	%		261			224			-14.2	%
Total operating expenses		551			538			569			538			572			3.8	%		1,656			1,680			1.4	%
Income (loss) from operations before taxes		160			154			162			196			173			8.1	%		523			530			1.3	%
Federal income tax expense (benefit)		7			23			25			38			34		NM				81			97			19.8	%
Income (loss) from operations	$	153		$	131		$	137		$	158		$	139			-9.2	%	$	442		$	433			-2.0	%

Effective Federal Income Tax Rate		4.2	%		15.2	%		15.4	%		19.6	%		19.7	%					15.4	%		18.4	%

Average Equity, Excluding Goodwill and AOCI	$	2,580		$	2,828		$	2,957		$	3,088		$	3,093			19.9	%	$	2,396		$	3,046			27.1	%

ROE, Excluding Goodwill		23.8	%		18.5	%		18.5	%		20.4	%		17.9	%					24.6	%		19.0	%

Return on Average Account Values		72			62			61			70			60			(12	)		68			64			(4	)

Account Values
Separate account values:
Average	$	65,169		$	64,173		$	69,003		$	69,222		$	71,535			9.8	%	$	66,625		$	69,926			5.0	%
End-of-period		60,774			65,010			71,059			69,615			73,401			20.8	%		60,774			73,401			20.8	%
General account values:
Average		20,415			20,535			20,534			20,668			20,788			1.8	%		20,190			20,678			2.4	%
End-of-period		20,455			20,524			20,609			20,762			20,757			1.5	%		20,455			20,757			1.5	%

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 Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change			9/30/11			9/30/12			Change
Income (Loss) from Operations
Operating revenues:
Insurance fees	$	51		$	49		$	52		$	53		$	53			3.9	%	$	161		$	158			-1.9	%
Net investment income		193			194			197			202			199			3.1	%		598			598			0.0	%
Other revenues and fees		3			3			3			3			3			0.0	%		12			9			-25.0	%
Total operating revenues		247			246			252			258			255			3.2	%		771			765			-0.8	%
Operating expenses:
Interest credited		109			112			111			112			114			4.6	%		326			337			3.4	%
Benefits		2			-			-			-			-			-100.0	%		2			-			-100.0	%
Commissions incurred		16			17			18			17			17			6.3	%		50			52			4.0	%
Other expenses incurred		68			74			76			78			81			19.1	%		212			236			11.3	%
Amounts capitalized		(8	)		(9	)		(10	)		(9	)		(9	)		-12.5	%		(26	)		(28	)		-7.7	%
Amortization		7			7			10			10			13			85.7	%		26			33			26.9	%
Total operating expenses		194			201			205			208			216			11.3	%		590			630			6.8	%
Income (loss) from operations before taxes		53			45			47			50			39			-26.4	%		181			135			-25.4	%
Federal income tax expense (benefit)		14			12			12			12			10			-28.6	%		52			34			-34.6	%
Income (loss) from operations	$	39		$	33		$	35		$	38		$	29			-25.6	%	$	129		$	101			-21.7	%

Effective Federal Income Tax Rate		26.9	%		26.4	%		26.1	%		24.0	%		26.0	%					29.0	%		25.3	%

Average Equity, Excluding Goodwill and AOCI	$	864		$	857		$	905		$	995		$	1,025			18.6	%	$	878		$	975			11.0	%

ROE, Excluding Goodwill		18.1	%		15.6	%		15.3	%		15.2	%		11.2	%					19.5	%		13.8	%

Return on Average Account Values		40			35			34			37			27			(13	)		43			33			(10	)

Account Values
Separate account values:
Average	$	13,217		$	12,783		$	13,589		$	13,373		$	13,558			2.6	%	$	13,889		$	13,507			-2.8	%
End-of-period		12,122			12,867			13,959			13,338			13,788			13.7	%		12,122			13,788			13.7	%
Mutual fund account values:
Average		12,450			12,327			13,522			14,039			14,631			17.5	%		12,655			14,047			11.0	%
End-of-period		11,503			12,636			14,241			14,056			15,073			31.0	%		11,503			15,073			31.0	%
General account values:
Average		13,244			13,524			13,723			13,903			14,126			6.7	%		13,048			13,918			6.7	%
End-of-period		13,395			13,630			13,820			14,003			14,242			6.3	%		13,395			14,242			6.3	%

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 Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change			9/30/11			9/30/12			Change
Income (Loss) from Operations
Operating revenues:
Insurance premiums	$	104		$	117		$	109		$	114		$	103			-1.0	%	$	324		$	326			0.6	%
Insurance fees		498			505			529			511			605			21.5	%		1,473			1,645			11.7	%
Net investment income		569			558			588			606			578			1.6	%		1,736			1,773			2.1	%
Operating realized gain (loss)		-			-			-			(1	)		1		NM				-			1		NM
Other revenues and fees		5			7			6			7			9			80.0	%		19			20			5.3	%
Total operating revenues		1,176			1,187			1,232			1,237			1,296			10.2	%		3,552			3,765			6.0	%
Operating expenses:
Interest credited		312			314			311			311			319			2.2	%		921			941			2.2	%
Benefits		152			460			475			477			296			94.7	%		1,209			1,248			3.2	%
Commissions incurred		161			179			130			126			115			-28.6	%		500			371			-25.8	%
Other expenses incurred		171			180			174			168			168			-1.8	%		498			510			2.4	%
Amounts capitalized		(183	)		(211	)		(145	)		(143	)		(131	)		28.4	%		(569	)		(420	)		26.2	%
Amortization		344			61			80			97			313			-9.0	%		362			490			35.4	%
Total operating expenses		957			983			1,025			1,036			1,080			12.9	%		2,921			3,140			7.5	%
Income (loss) from operations before taxes		219			204			207			201			216			-1.4	%		631			625			-1.0	%
Federal income tax expense (benefit)		65			66			65			63			62			-4.6	%		198			191			-3.5	%
Income (loss) from operations	$	154		$	138		$	142		$	138		$	154			0.0	%	$	433		$	434			0.2	%

Effective Federal Income Tax Rate		29.8	%		32.3	%		31.5	%		31.3	%		28.8	%					31.5	%		30.5	%

Average Equity, Excluding Goodwill and AOCI	$	5,660		$	5,628		$	5,710		$	5,864		$	5,938			4.9	%	$	5,628		$	5,838			3.7	%

ROE, Excluding Goodwill		10.9	%		9.8	%		10.0	%		9.4	%		10.3	%					10.2	%		9.9	%

Average Account Values	$	34,493		$	34,848		$	35,643		$	36,064		$	36,355			5.4	%	$	34,239		$	36,021			5.2	%

In-Force Face Amount
UL and other	$	304,475		$	307,900		$	307,957		$	308,763		$	308,470			1.3	%	$	304,475		$	308,470			1.3	%
Term insurance		269,969			271,931			272,006			273,305			275,992			2.2	%		269,969			275,992			2.2	%
Total in-force face amount	$	574,444		$	579,831		$	579,963		$	582,068		$	584,462			1.7	%	$	574,444		$	584,462			1.7	%

Page 18

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

	For the Three Months Ended																		For the Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change			9/30/11			9/30/12			Change
Income (Loss) from Operations
Operating revenues:
Insurance premiums	$	440		$	442		$	463		$	495		$	473			7.5	%	$	1,337		$	1,431			7.0	%
Net investment income		37			37			38			42			41			10.8	%		115			121			5.2	%
Other revenues and fees		2			2			3			3			3			50.0	%		6			8			33.3	%
Total operating revenues		479			481			504			540			517			7.9	%		1,458			1,560			7.0	%
Operating expenses:
Interest credited		1			1			1			1			1			0.0	%		2			3			0.5
Benefits		319			323			350			368			360			12.9	%		991			1,078			8.8	%
Commissions incurred		50			51			54			53			55			10.0	%		150			162			8.0	%
Other expenses incurred		72			85			73			82			82			13.9	%		200			237			18.5	%
Amounts capitalized		(13	)		(21	)		(11	)		(17	)		(15	)		-15.4	%		(31	)		(43	)		-38.7	%
Amortization		9			11			12			11			10			11.1	%		28			33			17.9	%
Total operating expenses		438			450			479			498			493			12.6	%		1,340			1,470			9.7	%
Income (loss) from operations before taxes		41			31			25			42			24			-41.5	%		118			90			-23.7	%
Federal income tax expense (benefit)		14			11			9			15			8			-42.9	%		41			31			-24.4	%
Income (loss) from operations	$	27		$	20		$	16		$	27		$	16			-40.7	%	$	77		$	59			-23.4	%

Effective Federal Income Tax Rate		35.0	%		35.0	%		35.0	%		35.6	%		34.2	%					35.0	%		35.1	%

Average Equity, Excluding Goodwill and AOCI	$	875		$	889		$	906		$	927		$	955			9.1	%	$	880		$	929			5.6	%

ROE, Excluding Goodwill		12.3	%		9.2	%		7.1	%		11.6	%		6.5	%					11.6	%		8.4	%

Loss Ratios by Product Line
Life		72.1	%		75.1	%		78.2	%		75.0	%		76.8	%					74.7	%		76.7	%
Disability		70.4	%		69.6	%		70.1	%		69.6	%		76.3	%					70.0	%		72.0	%
Dental		76.2	%		71.6	%		82.1	%		76.5	%		69.0	%					80.0	%		75.7	%
Total non-medical		71.8	%		72.2	%		74.9	%		72.7	%		75.7	%					73.1	%		74.4	%
Medical		86.9	%		88.6	%		87.6	%		89.7	%		85.4	%					87.8	%		88.1	%

Page 19

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

	For the Three Months Ended																		For the Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change			9/30/11			9/30/12			Change
Other Operations
Operating revenues:
Insurance premiums	$	1		$	-		$	-		$	3		$	-			-100.0	%	$	1		$	4			300.0	%
Net investment income		80			71			70			68			61			-23.8	%		237			198			-16.5	%
Amortization of deferred gain on business sold through reinsurance		18			18			18			18			18			0.0	%		54			54			0.0	%
Media revenues		20			21			17			21			21			5.0	%		56			60			7.1	%
Other revenues and fees		3			(1	)		-			3			1			-66.7	%		4			5			25.0	%
Total operating revenues		122			109			105			113			101			-17.2	%		352			321			-8.8	%
Operating expenses:
Interest credited		27			28			31			30			30			11.1	%		85			91			7.1	%
Benefits		34			31			28			35			43			26.5	%		95			105			10.5	%
Media expenses		17			18			16			16			16			-5.9	%		51			49			-3.9	%
Commissions and other expenses		34			28			19			15			33			-2.9	%		62			69			11.3	%
Interest and debt expenses		71			70			68			68			68			-4.2	%		215			203			-5.6	%
Total operating expenses		183			175			162			164			190			3.8	%		508			517			1.8	%
Income (loss) from operations before taxes		(61	)		(66	)		(57	)		(51	)		(89	)		-45.9	%		(156	)		(196	)		-25.6	%
Federal income tax expense (benefit)		(17	)		(24	)		(23	)		(12	)		(86	)	NM				(52	)		(121	)	NM
Income (loss) from operations	$	(44	)	$	(42	)	$	(34	)	$	(39	)	$	(3	)		93.2	%	$	(104	)	$	(75	)		27.9	%



Discontinued Operations
Gain (loss) on disposal before taxes	$	(3	)	$	-		$	(1	)	$	-		$	-			100.0	%	$	(3	)	$	(1	)		66.7	%
Federal income tax expense (benefit)		5			-			-			-			(28	)	NM				5			(28	)	NM
Gain (loss) on disposal	$	(8	)	$	-		$	(1	)	$	-		$	28		NM			$	(8	)	$	27		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 Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change			9/30/11			9/30/12			Change
DAC and VOBA
Balance as of beginning-of-period	$	7,699		$	6,705		$	6,776		$	6,880		$	6,505			-16	%	$	7,414		$	6,776			-8.6	%
Business sold through reinsurance		2			11			-			-			2			0.0	%		2			2			0.0	%
Deferrals		341			364			290			319			293			-14	%		1,031			902			-12.5	%
Operating amortization		(425	)		(170	)		(200	)		(204	)		(376	)		12	%		(676	)		(780	)		-15.4	%
Deferrals, net of operating amortization		(84	)		194			90			115			(83	)		1	%		355			122			-65.6	%
Amortization associated with benefit ratio unlocking		7			(5	)		(5	)		2			(2	)	NM				6			(5	)	NM
Adjustment related to realized (gains) losses		3			12			19			(34	)		(31	)	NM				(36	)		(45	)		-25.0	%
Adjustment related to unrealized (gains) losses		(922	)		(141	)		-			(458	)		(578	)		37	%		(1,036	)		(1,037	)		-0.1	%
Balance as of end-of-period	$	6,705		$	6,776		$	6,880		$	6,505		$	5,813			-13	%	$	6,705		$	5,813			-13.3	%

DSI
Balance as of beginning-of-period	$	276		$	268		$	271		$	268		$	260			-6	%	$	286		$	271			-5.2	%
Deferrals		11			10			9			10			11			0.0	%		29			30			3.4	%
Operating amortization		(10	)		(5	)		(12	)		(10	)		3			130	%		(34	)		(19	)		44.1	%
Deferrals, net of operating amortization		1			5			(3	)		-			14		NM				(5	)		11		NM
Amortization associated with benefit ratio unlocking		1			(1	)		(1	)		-			-			-100	%		1			(1	)	NM
Adjustment related to realized (gains) losses		(1	)		2			2			(4	)		(4	)	NM				(3	)		(5	)		-66.7	%
Adjustment related to unrealized (gains) losses		(9	)		(3	)		(1	)		(4	)		(18	)		-100	%		(11	)		(24	)	NM
Balance as of end-of-period	$	268		$	271		$	268		$	260		$	252			-6	%	$	268		$	252			-6.0	%

DFEL
Balance as of beginning-of-period	$	1,694		$	1,338		$	1,369		$	1,404		$	1,261			-26	%	$	1,502		$	1,369			-8.9	%
Deferrals		134			132			90			88			78			-42	%		411			256			-37.7	%
Operating amortization		(40	)		(36	)		(50	)		(42	)		(130	)	NM				(100	)		(222	)	NM
Deferrals, net of operating amortization		94			96			40			46			(52	)	NM				311			34			-89.1	%
Amortization associated with benefit ratio unlocking		2			(1	)		(1	)		-			(1	)	NM				1			(1	)	NM
Adjustment related to realized (gains) losses		(4	)		1			5			(6	)		(12	)	NM				(10	)		(12	)		-20.0	%
Adjustment related to unrealized (gains) losses		(448	)		(65	)		(9	)		(183	)		(195	)		56	%		(466	)		(389	)		16.5	%
Balance as of end-of-period	$	1,338		$	1,369		$	1,404		$	1,261		$	1,001			-25	%	$	1,338		$	1,001			-25.2	%

Page 21

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

	For the Three Months Ended																		For the Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change			9/30/11			9/30/12			Change
DAC and VOBA
Balance as of beginning-of-period	$	1,913		$	1,877		$	1,912		$	1,965		$	1,940			1.4	%	$	1,882		$	1,912			1.6	%
Deferrals		137			123			125			149			138			0.7	%		405			411			1.5	%
Operating amortization		(65	)		(90	)		(98	)		(86	)		(40	)		38.5	%		(261	)		(224	)		14.2	%
Deferrals, net of operating amortization		72			33			27			63			98			36.1	%		144			187			29.9	%
Amortization associated with benefit ratio unlocking		7			(5	)		(4	)		2			(2	)	NM				6			(5	)	NM
Adjustment related to realized (gains) losses		1			13			17			(34	)		(32	)	NM				(15	)		(48	)	NM
Adjustment related to unrealized (gains) losses		(116	)		(6	)		13			(56	)		(94	)		19.0	%		(140	)		(136	)		2.9	%
Balance as of end-of-period	$	1,877		$	1,912		$	1,965		$	1,940		$	1,910			1.8	%	$	1,877		$	1,910			1.8	%

DSI
Balance as of beginning-of-period	$	274		$	266		$	269		$	267		$	258			-5.8	%	$	284		$	269			-5.3	%
Deferrals		10			10			9			10			11			10.0	%		29			30			3.4	%
Operating amortization		(11	)		(5	)		(12	)		(10	)		3			127.3	%		(34	)		(19	)		44.1	%
Deferrals, net of operating amortization		(1	)		5			(3	)		-			14		NM				(5	)		11		NM
Amortization associated with benefit ratio unlocking		1			(1	)		(1	)		-			-			-100.0	%		1			(1	)	NM
Adjustment related to realized (gains) losses		(1	)		1			3			(4	)		(4	)	NM				(3	)		(5	)		-66.7	%
Adjustment related to unrealized (gains) losses		(7	)		(2	)		(1	)		(5	)		(18	)	NM				(11	)		(24	)	NM
Balance as of end-of-period	$	266		$	269		$	267		$	258		$	250			-6.0	%	$	266		$	250			-6.0	%

DFEL
Balance as of beginning-of-period	$	247		$	249		$	263		$	267		$	265			7.3	%	$	222		$	263			18.5	%
Deferrals		16			10			6			7			5			-68.8	%		51			18			-64.7	%
Operating amortization		(9	)		4			(5	)		(3	)		2			122.2	%		(20	)		(7	)		65.0	%
Deferrals, net of operating amortization		7			14			1			4			7			0.0	%		31			11			-64.5	%
Amortization associated with benefit ratio unlocking		2			(1	)		(1	)		-			(1	)	NM				1			(1	)	NM
Adjustment related to realized (gains) losses		(5	)		2			5			(6	)		(12	)	NM				(6	)		(13	)	NM
Adjustment related to unrealized (gains) losses		(2	)		(1	)		(1	)		-			(1	)		50.0	%		1			(2	)	NM
Balance as of end-of-period	$	249		$	263		$	267		$	265		$	258			3.6	%	$	249		$	258			3.6	%

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 Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change			9/30/11			9/30/12			Change
DAC and VOBA - Retirement Plan Services
Balance as of beginning-of-period	$	217		$	189		$	183		$	165		$	145			-33.2	%	$	195		$	183			-6.2	%
Deferrals		8			9			10			9			9			12.5	%		26			28			7.7	%
Operating amortization		(7	)		(7	)		(10	)		(10	)		(13	)		-85.7	%		(26	)		(33	)		-26.9	%
Deferrals, net of operating amortization		1			2			-			(1	)		(4	)	NM				-			(5	)	NM
Adjustment related to unrealized (gains) losses		(29	)		(8	)		(18	)		(19	)		(33	)		-13.8	%		(6	)		(70	)	NM
Balance as of end-of-period	$	189		$	183		$	165		$	145		$	108			-42.9	%	$	189		$	108			-42.9	%

DAC and VOBA - Life Insurance
Balance as of beginning-of-period	$	5,417		$	4,484		$	4,516		$	4,586		$	4,251			-21.5	%	$	5,186		$	4,516			-12.9	%
Business sold through reinsurance		2			11			-			-			2			0.0	%		2			2			0.0	%
Deferrals		183			211			145			143			131			-28.4	%		569			420			-26.2	%
Operating amortization		(344	)		(61	)		(80	)		(97	)		(313	)		9.0	%		(362	)		(490	)		-35.4	%
Deferrals, net of operating amortization		(161	)		150			65			46			(182	)		-13.0	%		207			(70	)	NM
Adjustment related to realized (gains) losses		3			(1	)		1			(1	)		1			-66.7	%		(21	)		3			114.3	%
Adjustment related to unrealized (gains) losses		(777	)		(128	)		4			(380	)		(452	)		41.8	%		(890	)		(831	)		6.6	%
Balance as of end-of-period	$	4,484		$	4,516		$	4,586		$	4,251		$	3,620			-19.3	%	$	4,484		$	3,620			-19.3	%

DFEL - Life Insurance
Balance as of beginning-of-period	$	1,447		$	1,088		$	1,106		$	1,136		$	997			-31.1	%	$	1,280		$	1,106			-13.6	%
Deferrals		119			122			83			82			73			-38.7	%		360			238			-33.9	%
Operating amortization		(31	)		(39	)		(45	)		(39	)		(132	)	NM				(80	)		(216	)	NM
Deferrals, net of operating amortization		88			83			38			43			(59	)	NM				280			22			-92.1	%
Adjustment related to realized (gains) losses		1			-			-			-			-			-100.0	%		(3	)		-			100.0	%
Adjustment related to unrealized (gains) losses		(448	)		(65	)		(8	)		(182	)		(196	)		56.3	%		(469	)		(386	)		17.7	%
Balance as of end-of-period	$	1,088		$	1,106		$	1,136		$	997		$	742			-31.8	%	$	1,088		$	742			-31.8	%

DAC and VOBA - Group Protection
Balance as of beginning-of-period	$	151		$	155		$	165		$	164		$	170			12.6	%	$	151		$	165			9.3	%
Deferrals		13			21			11			17			15			15.4	%		32			43			34.4	%
Operating amortization		(9	)		(11	)		(12	)		(11	)		(10	)		-11.1	%		(28	)		(33	)		-17.9	%
Deferrals, net of operating amortization		4			10			(1	)		6			5			25.0	%		4			10			150.0	%
Balance as of end-of-period	$	155		$	165		$	164		$	170		$	175			12.9	%	$	155		$	175			12.9	%

Page 23

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

	For the Three Months Ended																		For the Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change			9/30/11			9/30/12			Change
Fixed Annuities
Balance as of beginning-of-period	$	17,938		$	18,009		$	18,106		$	18,186		$	18,273			1.9	%	$	17,420		$	18,106			3.9	%
Gross deposits		554			347			295			445			489			-11.7	%		1,580			1,229			-22.2	%
Withdrawals and deaths		(508	)		(475	)		(465	)		(477	)		(599	)		-17.9	%		(1,368	)		(1,541	)		-12.6	%
Net flows		46			(128	)		(170	)		(32	)		(110	)	NM				212			(312	)	NM
Reinvested interest credited		15			215			241			110			173		NM				348			523			50.3	%
Sales inducements deferred		10			10			9			9			11			10.0	%		29			30			3.4	%
Balance as of end-of-period, gross		18,009			18,106			18,186			18,273			18,347			1.9	%		18,009			18,347			1.9	%
Reinsurance ceded		(920	)		(901	)		(883	)		(871	)		(884	)		3.9	%		(920	)		(884	)		3.9	%
Balance as of end-of-period, net	$	17,089		$	17,205		$	17,303		$	17,402		$	17,463			2.2	%	$	17,089		$	17,463			2.2	%

Variable Annuities
Balance as of beginning-of-period	$	71,837		$	64,140		$	68,330		$	74,366		$	72,976			1.6	%	$	68,390		$	68,330			-0.1	%
Gross deposits		2,155			2,028			2,185			2,422			2,188			1.5	%		6,694			6,796			1.5	%
Withdrawals and deaths		(1,538	)		(1,555	)		(1,722	)		(1,689	)		(1,682	)		-9.4	%		(5,061	)		(5,093	)		-0.6	%
Net flows		617			473			463			733			506			-18.0	%		1,633			1,703			4.3	%
Change in market value and reinvestment		(8,314	)		3,717			5,573			(2,123	)		3,214			138.7	%		(5,883	)		6,663			213.3	%
Balance as of end-of-period, gross		64,140			68,330			74,366			72,976			76,696			19.6	%		64,140			76,696			19.6	%
Reinsurance ceded		-			(1	)		(1	)		(1	)		(1	)	NM				-			(1	)	NM
Balance as of end-of-period	$	64,140		$	68,329		$	74,365		$	72,975		$	76,695			19.6	%	$	64,140		$	76,695			19.6	%


Balance as of beginning-of-period	$	89,775		$	82,149		$	86,436		$	92,552		$	91,249			1.6	%	$	85,810		$	86,436			0.7	%
Gross deposits		2,709			2,375			2,480			2,867			2,677			-1.2	%		8,274			8,025			-3.0	%
Withdrawals and deaths		(2,046	)		(2,030	)		(2,187	)		(2,166	)		(2,281	)		-11.5	%		(6,429	)		(6,634	)		-3.2	%
Net flows		663			345			293			701			396			-40.3	%		1,845			1,391			-24.6	%
Change in market value and reinvestment		(8,299	)		3,932			5,814			(2,013	)		3,387			140.8	%		(5,535	)		7,186			229.8	%
Sales inducements deferred		10			10			9			9			11			10.0	%		29			30			3.4	%
Balance as of end-of-period, gross		82,149			86,436			92,552			91,249			95,043			15.7	%		82,149			95,043			15.7	%
Reinsurance ceded		(920	)		(902	)		(884	)		(872	)		(885	)		3.8	%		(920	)		(885	)		3.8	%
Balance as of end-of-period, net	$	81,229		$	85,534		$	91,668		$	90,377		$	94,158			15.9	%	$	81,229		$	94,158			15.9	%

Page 24

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

	For the Three Months Ended																		For the Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change			9/30/11			9/30/12			Change
Small Market
Balance as of beginning-of-period	$	6,566		$	5,856		$	6,167		$	6,641		$	6,470			-1.5	%	$	6,396		$	6,168			-3.6	%
Gross deposits		312			354			418			372			362			16.0	%		953			1,152			20.9	%
Withdrawals and deaths		(336	)		(357	)		(412	)		(368	)		(330	)		1.8	%		(1,045	)		(1,110	)		-6.2	%
Net flows		(24	)		(3	)		6			4			32			233.3	%		(92	)		42			145.7	%
Transfers between fixed and variable accounts		-			11			(11	)		-			(5	)	NM				(6	)		(16	)	NM
Change in market value and reinvestment		(686	)		303			479			(175	)		269			139.2	%		(442	)		572			229.4	%
Balance as of end-of-period	$	5,856		$	6,167		$	6,641		$	6,470		$	6,766			15.5	%	$	5,856		$	6,766			15.5	%

Mid - Large Market
Balance as of beginning-of-period	$	17,333		$	16,106		$	17,435		$	19,199		$	19,139			10.4	%	$	16,207		$	17,434			7.6	%
Gross deposits		969			1,053			920			746			1,186			22.4	%		2,504			2,852			13.9	%
Withdrawals and deaths		(408	)		(632	)		(505	)		(395	)		(798	)		-95.6	%		(1,463	)		(1,697	)		-16.0	%
Net flows		561			421			415			351			388			-30.8	%		1,041			1,155			11.0	%
Transfers between fixed and variable accounts		(19	)		(11	)		(2	)		(5	)		(17	)		10.5	%		(57	)		(24	)		57.9	%
Change in market value and reinvestment		(1,769	)		919			1,351			(406	)		783			144.3	%		(1,085	)		1,728			259.3	%
Balance as of end-of-period	$	16,106		$	17,435		$	19,199		$	19,139		$	20,293			26.0	%	$	16,106		$	20,293			26.0	%

Multi-Fund® and Other
Balance as of beginning-of-period	$	16,388		$	15,058		$	15,531		$	16,180		$	15,788			-3.7	%	$	16,221		$	15,531			-4.3	%
Gross deposits		175			163			173			173			169			-3.4	%		539			515			-4.5	%
Withdrawals and deaths		(383	)		(362	)		(382	)		(334	)		(357	)		6.8	%		(1,203	)		(1,074	)		10.7	%
Net flows		(208	)		(199	)		(209	)		(161	)		(188	)		9.6	%		(664	)		(559	)		15.8	%
Change in market value and reinvestment		(1,122	)		672			858			(231	)		444			139.6	%		(499	)		1,072		NM
Balance as of end-of-period	$	15,058		$	15,531		$	16,180		$	15,788		$	16,044			6.5	%	$	15,058		$	16,044			6.5	%

Total
Balance as of beginning-of-period	$	40,287		$	37,020		$	39,133		$	42,020		$	41,397			2.8	%	$	38,824		$	39,133			0.8	%
Gross deposits		1,456			1,570			1,511			1,291			1,717			17.9	%		3,996			4,519			13.1	%
Withdrawals and deaths		(1,127	)		(1,351	)		(1,299	)		(1,097	)		(1,485	)		-31.8	%		(3,711	)		(3,881	)		-4.6	%
Net flows		329			219			212			194			232			-29.5	%		285			638			123.9	%
Transfers between fixed and variable accounts		(19	)		-			(13	)		(5	)		(22	)		-15.8	%		(63	)		(40	)		36.5	%
Change in market value and reinvestment		(3,577	)		1,894			2,688			(812	)		1,496			141.8	%		(2,026	)		3,372			266.4	%
Balance as of end-of-period	$	37,020		$	39,133		$	42,020		$	41,397		$	43,103			16.4	%	$	37,020		$	43,103			16.4	%

Page 25

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

	For the Three Months Ended																		For the Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12			Change			9/30/11			9/30/12			Change
Interest-Sensitive Life
Balance as of beginning-of-period	$	30,148		$	30,638		$	31,219		$	31,494		$	31,750			5.3	%	$	29,365		$	31,219			6.3	%
Deposits		1,165			1,297			991			990			971			-16.7	%		3,376			2,952			-12.6	%
Withdrawals and deaths		(232	)		(268	)		(307	)		(321	)		(327	)		-40.9	%		(823	)		(955	)		-16.0	%
Net flows		933			1,029			684			669			644			-31.0	%		2,553			1,997			-21.8	%
Contract holder assessments		(726	)		(751	)		(710	)		(712	)		(712	)		1.9	%		(2,165	)		(2,134	)		1.4	%
Reinvested interest credited		283			303			301			299			304			7.4	%		885			904			2.1	%
Balance as of end-of-period, gross		30,638			31,219			31,494			31,750			31,986			4.4	%		30,638			31,986			4.4	%
Reinsurance ceded		(877	)		(870	)		(862	)		(859	)		(847	)		3.4	%		(877	)		(847	)		3.4	%
Balance as of end-of-period, net	$	29,761		$	30,349		$	30,632		$	30,891		$	31,139			4.6	%	$	29,761		$	31,139			4.6	%

VUL
Balance as of beginning-of-period	$	6,157		$	5,375		$	5,687		$	6,202		$	6,005			-2.5	%	$	5,962		$	5,687			-4.6	%
Deposits		178			209			168			147			135			-24.2	%		511			451			-11.7	%
Withdrawals and deaths		(148	)		(207	)		(101	)		(93	)		(84	)		43.2	%		(412	)		(279	)		32.3	%
Net flows		30			2			67			54			51			70.0	%		99			172			73.7	%
Contract holder assessments		(93	)		(93	)		(95	)		(88	)		(104	)		-11.8	%		(276	)		(287	)		-4.0	%
Change in market value and reinvestment		(719	)		403			543			(163	)		310			143.1	%		(410	)		690			268.3	%
Balance as of end-of-period, gross		5,375			5,687			6,202			6,005			6,262			16.5	%		5,375			6,262			16.5	%
Reinsurance ceded		(717	)		(758	)		(826	)		(775	)		(812	)		-13.2	%		(717	)		(812	)		-13.2	%
Balance as of end-of-period, net	$	4,658		$	4,929		$	5,376		$	5,230		$	5,450			17.0	%	$	4,658		$	5,450			17.0	%

Total
Balance as of beginning-of-period	$	36,305		$	36,013		$	36,906		$	37,696		$	37,755			4.0	%	$	35,327		$	36,906			4.5	%
Deposits		1,343			1,506			1,159			1,137			1,106			-17.6	%		3,887			3,403			-12.5	%
Withdrawals and deaths		(380	)		(475	)		(408	)		(414	)		(411	)		-8.2	%		(1,235	)		(1,234	)		0.1	%
Net flows		963			1,031			751			723			695			-27.8	%		2,652			2,169			-18.2	%
Contract holder assessments		(819	)		(844	)		(805	)		(800	)		(816	)		0.4	%		(2,441	)		(2,421	)		0.8	%
Change in market value and reinvestment		(436	)		706			844			136			614			240.8	%		475			1,594			235.6	%
Balance as of end-of-period, gross		36,013			36,906			37,696			37,755			38,248			6.2	%		36,013			38,248			6.2	%
Reinsurance ceded		(1,594	)		(1,628	)		(1,688	)		(1,634	)		(1,659	)		-4.1	%		(1,594	)		(1,659	)		-4.1	%
Balance as of end-of-period, net	$	34,419		$	35,278		$	36,008		$	36,121		$	36,589			6.3	%	$	34,419		$	36,589			6.3	%

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

	For the Three Months Ended																	For the Nine Months Ended
	9/30/11			12/31/11			3/31/12			6/30/12			9/30/12		Change			9/30/11			9/30/12			Change
Revenues
Operating revenues	$	2,735		$	2,715		$	2,824		$	2,882		$	2,914		6.5	%	$	8,312		$	8,621			3.7	%
Excluded realized gain (loss)		(186	)		(149	)		(112	)		18			39		121.0	%		(239	)		(55	)		77.0	%
Amortization of DFEL on benefit ratio unlocking		(3	)		1			1			(1	)		-		100.0	%		(2	)		-			100.0	%
Amortization of deferred gains arising from reserve changes on business sold through reinsurance		1			1			1			-			1		0.0	%		2			2			0.0	%
Total revenues	$	2,547		$	2,568		$	2,714		$	2,899		$	2,954		16.0	%	$	8,073		$	8,568			6.1	%

Excluded Realized Gain (Loss) Net of Benefit Ratio Unlocking, After-Tax
Total excluded realized gain (loss)	$	(121	)	$	(97	)	$	(73	)	$	12		$	25		120.7	%	$	(156	)	$	(35	)		77.6	%
Benefit ratio unlocking		(42	)		25			23			(10	)		10		123.8	%		(39	)		24			161.5	%
Net gain (loss), after-tax	$	(163	)	$	(72	)	$	(50	)	$	2		$	35		121.5	%	$	(195	)	$	(11	)		94.4	%

Net Income
Income (loss) from operations	$	329		$	280		$	296		$	322		$	335		1.8	%	$	977		$	952			-2.6	%
Excluded realized gain (loss)		(121	)		(97	)		(73	)		12			25		120.7	%		(156	)		(35	)		77.6	%
Benefit ratio unlocking		(42	)		25			23			(10	)		10		123.8	%		(39	)		24			161.5	%
Income (loss) from reserve changes (net of related amortization) on business sold through reinsurance		-			-			-			-			1	NM				1			1			0.0	%
Gain (loss) on early extinguishment of debt		(5	)		-			-			-			-		100.0	%		(5	)		-			100.0	%
Impairment of intangibles		-			(747	)		-			-			2	NM				-			2		NM
Income (loss) from discontinued operations		(8	)		-			(1	)		-			29	NM				(8	)		27		NM
Net income (loss)	$	153		$	(539	)	$	245		$	324		$	402		162.7	%	$	770		$	971			26.1	%

Earnings (Loss) Per Common Share - Diluted
Income (loss) from operations	$	1.03		$	0.92		$	1.00		$	1.09		$	1.18		14.6	%	$	3.05		$	3.29			7.9	%
Excluded realized gain (loss)		(0.38	)		(0.33	)		(0.25	)		0.04			0.08		121.1	%		(0.48	)		(0.12	)		75.0	%
Benefit ratio unlocking		(0.13	)		0.08			0.08			(0.03	)		0.04		130.8	%		(0.12	)		0.08			166.7	%
Gain (loss) on early extinguishment of debt		(0.02	)		-			-			-			-		100.0	%		(0.02	)		-			100.0	%
Impairment of intangibles		-			(2.51	)		-			-			0.01	NM				-			0.01		NM
Income (loss) from discontinued operations		(0.03	)		-			-			-			0.10	NM				(0.03	)		0.09		NM
Adjustment attributable to using different average diluted shares		-			0.03			-			-			-	NM				-			-		NM
Net income (loss)	$	0.47		$	(1.81	)	$	0.83		$	1.10		$	1.41		200.0	%	$	2.40		$	3.35			39.6	%

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